So how does the housing boom end?

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?”

Critiques of Govt’s contentious housing package raise questions about whose advice was sought

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”

Nats flush Minister of Motels into the open at Question Time but ACT have yet to flush out figures they seek on new houses

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”

Houses (and their prohibitive prices) will be high in Ardern’s considerations as she appoints her ministerial team

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”

How taxpayers are pumping millions into the motel business to provide emergency housing

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”

Mrs Fixit has a new task: can she work a miracle?

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”.

Pardon?

Continue reading “Mrs Fixit has a new task: can she work a miracle?”

Before you get the warm fuzzies about Megan’s handouts for heaters, check out the frosty reaction from property investors

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”

The absence of emotive media reports and silence from the lobbyists does not mean the housing “crisis” has been fixed

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”

Phil Twyford (remember?) is working on rent controls but maybe he should dump the idea

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”

Phil was full of his housing accomplishments – but see how the demand has burgeoned

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”