It’s an old adage that a speculative market collapses not when prices get crazy but when the last person who insists prices are crazy gives up in despair.
Worth bearing in mind when London’s Financial Times tells us that the pandemic has fuelled “the broadest global house price boom in two decades”, even bigger than the one which preceded and helped trigger the 2008 global financial crisis, and which is understandably reviving concerns about financial stability.
Continue reading “So how does the housing boom end?”
So what happened to “go hard, go early”? Does anyone expect house prices (which have risen more than $100,000 since early 2020) to start falling?
The Ardern government’s housing package aroused curiously mixed reactions, hardly any of them providing a glimmer of light to would-be first-home buyers that house prices will be falling any time soon.
From one side, the warning came that rent controls could not be far behind. From the other, “market forces” and the evils of neo-liberalism had at last been corralled.
Over on the Left, Chris Trotter sees a housing crisis ripping apart the country’s weakest and most vulnerable communities.
“While the detail of the Labour government’s housing package has been sufficient to unleash the very worst impulses of NZ’s landlord class – whose screams of rage and wild threats of social vengeance have pretty much confirmed the rest of NZ society’s worst fears concerning‘property investors’ – it is the rank insubordination of the nation’s elected leaders which most rankles neo-liberalism’s true believers”. Continue reading “Critiques of Govt’s contentious housing package raise questions about whose advice was sought”
The headline on a press statement from ACT – Megan Woods In Hiding On Housing – suggested the Minister of Housing had gone to ground somewhere. It quickly became apparent she hadn’t .
The press statement was posted on Scoop at 1:38 pm. Before long, Woods was in the House answering questions about her housing portfolio, albeit from National, not ACT, and about the numbers of people being housed in motels rather than about the numbers of new houses forecast to be built this year.
The replies provided material for a press statement from the Nats later in the day, to highlight figures showing more than $1 million of taxpayer money is being spent each day on motels for emergency housing.
Maybe there’s a case for Woods becoming Minister of Motels.
According to the Nats’ press statement the Government spent $82.5 million, or $917,000 a day, in the past quarter on emergency housing grants for people to live in motels and similar accommodation. This is on top of the $155,000 a day the Government is spending on motels for transitional housing purposes.
This is a more than ten-fold increase on what was being spent on emergency housing when Labour came into office, National’s Housing spokesperson Nicola Willis says. Continue reading “Nats flush Minister of Motels into the open at Question Time but ACT have yet to flush out figures they seek on new houses”
One of the strange outcomes of the Covid-19 pandemic has been the surge in house prices, not just in Auckland but through the rest of the country. It’s a phenomenon that runs contrary to past experience when the economy has slipped into recession.
Many authorities say booming house prices are being driven by the loose monetary policy operated by the Reserve Bank in conjunction with the economic stimulus applied by the government. Mortgage rates have fallen, with at least one bank offering a rate below 2%.
The Reserve Bank’s chief economist Yuong Ha is on record as saying:
“The worse situation we’d face right now is actually if we had house prices falling”.
Just why that might be the case in the present recession has not been made clear, though he seemed to suggest the wealth effect of rising property prices is helping to sustain the economy. Continue reading “Houses (and their prohibitive prices) will be high in Ardern’s considerations as she appoints her ministerial team”
Blogger Lindsay Mitchell has used the Official Information Act to flush out data on emergency housing from the Ministry for Social Development.
The results have been posted under the heading Motel charges premium for emergency housing.
At long last MSD has updated OIA requests, Mitchell writes. Responses up to November 2019 are on-line
“ … and always make for interesting reading. For instance payments made to the Olive Tree Motel for emergency housing.”
Clients are granted an amount which is paid directly to the motel, Mitchell explains.
In the June 2019 quarter the motel was receiving $265 a night.
But nightly charges per unit range from $145 to $165 according to their website. Charges reduce for longer stays.
The response to another request reveals that over 600 accommodation providers received emergency grants in the June 2019 quarter. Continue reading “How taxpayers are pumping millions into the motel business to provide emergency housing”
Housing Minister Megan Woods this week eased herself past the KiwiBuild fiasco to announce a fresh range of housing policies. She conceded the commitment to specific KiwiBuild targets had been a “mistake”: others have labelled KiwiBuild as a “political humiliation”. Woods exuded confidence the new bundle of policies has what it takes to deliver on the government’s housing goals.
As for Greens co-leader Marama Davidson who appeared alongside Woods as the government’s housing policies were “reset”, she exclaimed that it was one of the best days in her political career. “I want to say to those NZers today who have given up hope on their dream of owning a home we have opened the door to you”.
Continue reading “Mrs Fixit has a new task: can she work a miracle?”
The Point of Order Trough Monitor typically alerts us to government spending decisions.
The merits of each grant, investment, loan and what-have-you which the monitor identifies are a matter of opinion. Recipients are apt to be keen to express their gratitude. Taxpayers often have cause to complain the money is being misspent.
But the monitor can also spot a handout which doesn’t measure up to what was promised. Somebody somewhere has been short-changed.
Take the case of the grants for energy-efficient heaters that are being dished out as part of the Government’s Warmer Kiwi Homes programme which aims to make homes warmer and more energy
Warmer Kiwi Homes? Who can quibble with that? Continue reading “Before you get the warm fuzzies about Megan’s handouts for heaters, check out the frosty reaction from property investors”
So what happened to New Zealand’s housing “crisis”? Was it real, or just another imagined but emotive issue akin to “peak oil”, the fetish of the Green Party back at the turn of the century which was accompanied by grim forebodings that the world would run out of oil by 2006?
Surely it was not just a figment of our – or the public’s – imagination! After all, the media for months carried nightly images of the hundreds of homeless on the streets, people living in garages or – if they were lucky – people being accommodated at state expense in motels.
That was in the run-up to the general election. Continue reading “The absence of emotive media reports and silence from the lobbyists does not mean the housing “crisis” has been fixed”
The Bay of Plenty Times – in an article which revealed how taxpayers are bearing the brunt of Tauranga’s social housing crisis – brought rental costs into the picture.
Among the data uncovered by the newspaper, three community housing providers have been paid almost $17m towards income-related rent subsidies in the last two financial years . These subsidies are the difference between market rents and the amount paid by a tenant in income-related rent.
Four transitional housing providers which provided warm, dry and safe short-term accommodation received about $2.3m over the same timeframe and $1m was spent on emergency housing special needs grants including motels, $624,000 of this mainly to motels in Tauranga from October 2018 to December 2018. Continue reading “Phil Twyford (remember?) is working on rent controls but maybe he should dump the idea”
Our attention was drawn to the demand side of considerations, in the latest Public Housing Quarterly Report, after Phil Twyford alerted us to its publication.
The report tracks progress and shares data on public housing and transitional housing supply, homelessness programmes, and other housing support.
The report includes data from the Housing Register, which captures the housing requirements of people who have applied for public housing through the Ministry of Social Development.
There were 10,712 people on the register at December 2018, a rise of 12% during the quarter.
More glaringly, it was 4530 more – an increase of 73% – than the numbers on the register in the December quarter of 2017, when a new government was settling in with a commitment to providing housing for those who need it . Continue reading “Phil was full of his housing accomplishments – but see how the demand has burgeoned”