If the New Zealand government actually wanted to moderate skyrocketing housing prices, they would start by critically examining central bank policies that incentive consumers and businesses to behave as if capital effortlessly self-replicates.
Instead, they remain convinced that they can centrally plan their way out of a debacle in which potential home buyers of moderate means are being squeezed out of the market thanks to zero percent interest rates.
“Like many central banks during the coronavirus pandemic, the RBNZ has pushed interest rates to record lows, eased mortgage lending curbs and pumped NZ$100 billion ($70.4 billion) into a quantitative easing programme.
Those measures, while boosting the economy, have fuelled an unprecedented housing market boom. In its latest forecasts, the RBNZ sees house price inflation rising up to 22.4% by the middle of this year, much higher that a November forecast of 7.9% for the year to June.”
“The RBNZ said it was looking into the government’s request for advice on implementing tools like debt-to-income ratios and interest-only mortgages.”
Having the central bank rectify the very problems that its own policies created amounts to tasking an arsonist with putting out his own fires. Failure is pretty much guaranteed at this point.
“If the New Zealand government actually wanted to moderate skyrocketing housing prices, they would start by critically examining central bank policies that incentive consumers and businesses to behave as if capital effortlessly self-replicates.”
I take “The length conservatives will go to avoid talking about immigration”, Alex.
Government never takes any actions to look at why what they are doing is not having the desired effect, because they don’t really care…
and of course they add more regulations and taxes to try to “fix” what they broke in the first place.
There comes a point when you have to ask, “is it a bubble? Or did the geniuses running the asylum break something?”
Immigration isn’t the problem. A free market for housing would fix that by building. Restrictions on building (zoning, municipal planning boards). Even higher mortgage rates won’t fix this – although it would slow the inflation.
Yes immigration is a problem. Not the only problem but a huge factor here. Chicoms make money on slave labor and then invest it in real estate in the West. Same is happening in Canada. Solution is simple: confiscate all the wealth of collaborators with enemy Chicom regime. There, problem solved.
People who say immigration is not a problem do not understand supply and demand. Supply is being restricted through regulation, and demand is increased by immigration.
The guy you’re responding to has made it his life goal to not understand anything.
You are indeed correct. Our housing shortages are almost entirely a supply issue exacerbated by central banks.
We’d like to keep this conversation subhuman demagogue free, so kindly stay out of it. It is beyond your cognitive capacity anyway.
Yes that is correct. But there is no reason to think of those problems as equal. There is no reason to protect interest of foreigners, especially enemy ones. Whatever the reasons for restricted supply are (and I agree with you they are bogus) within the frame of reference established by restrictions immigration exacerbates the problems. And immigration is an imprecise term that captures two separate phenomena. One is flood of low IQ turd worlders the other is Chicom slavers buying out real estate, these affect different segments of the market. Ultimately though, they put pressure on middle class and affect negatively the standard of living.
“Ultimately though, they put pressure on middle class and affect negatively the standard of living.”
No they don’t. We are all vastly richer for having access to a deeper labor market. More immigration = more investment.
Calgary had tons of immigration 10 years ago, housing wasn’t a problem because you could build stuff.
“No they don’t. We are all vastly richer for having access to a deeper labor market. More immigration = more investment.”
Repeating the same absurd lie does not make it rue. Bringing in boatloads of ex: Somalis, Haitians or Jamaicans has nothing to do with investment. We are richer despite the disastrous immigration policy not because of it. You can’t take two separate time series and infer that one drives the other just because they trend at the same time. I know that basic statistical analysis isn’t your strong suit but this is so stupid that even you should be ashamed.
And we are not richer than we used to be. Your generation in fact is likely the first generation in centuries that can’t count on a standard of living higher than that of your parents’.
“Calgary had tons of immigration 10 years ago, housing wasn’t a problem because you could build stuff.”
Yes and an exact parallel argument goes that when there are building restrictions immigration makes things worse. Both are bad and they amplify each other.
Again, remember your subhumanity. Don’t argue with your betters. You’re not qualified to do so.
There’s a very large restriction on building that’s unaffected by regulation: New Zealand is a volcanic island with limited space to build anything.
What?
New Zealand is composed of two major islands not one and many small islands some inhabited some not.
You can build in many places in the North Island despite the volcanoes, not many of them active anyway, but everyone wants to be within 25 miles of Auckland or Wellington.
You can build east of the mountains on the south island. Plenty of space. They have earthquakes but no active volcanoes.
Even if immigration did increase property cost, so what? You don’t have a right to cheap property. I do have a right to freedom of association ie mass immigration.
Boomers are the most selfish bastards ever. They’ve destroyed absolutely everything and covid was their last gasp at destroying all our lives. When boomers were twenty they could buy a house and now that every job has been shipped to China it’s out of reach to all but rich Chinese go figure. China sent us the boomer remover virus and the bastards put us in jail to save themselves.
You are dead wrong, Boomer generation was 1946 to 1964.
1) Gretchen Witmer, governor of Michigan, was born in 1971 – 7 years after the boomer generation. She is easily the most evil of the Blue State governors.
2) Gavin Newsome, governor of California is the second worst of the governors and was born in 1967.
3) Cuomo, Wolf and Klein are all Boomers, but they are all from the Democrat/Communist Party as are 1 & 2
4) Can you detect a pattern form the above, dude?
5) Donald Trump was born in 1946, making him a Boomer, and if you don’t like him then “F” off.
Learn how to distinguish between people. Oh, and Millennials, Gen X and Gen Y are not at all selfish? Whatever.
Early bloomer boomer flower children; a generation where your word mattered and work ethic wasn’t a meme.
The earliest boomers who spawned our entitled to their entitlements fascists can take credit for the new totalitarians.
They never stopped whining about injustice as they scurried off to their faculty clubs and sell-out gated communities.
Dinosaurs, sad relics and repudiations of the greatest generation, find our boomers, echoes and Gen brain dead useful.
Barely; only for now. Are the peasants revolting? Now the great unwashed expect a say in who rules them? Revolting.
Just curious.
Anybody noticed of late, although its been going on for a long time, that the politicians and bureaucrats, for some unknowable reason mess up the markets with their jack ass schemes.
They tell you that they have the brightest brains directly out of school and they bloody know stuff. Never had to do a damn thing in their sorry lives, never stepped a foot into real life conditions and they know their stuff.
The poor suckers, the New Zoolanders (sic), want everything from mama government. Let us see how it will turn out.
This is how this country is in such a damn mess. The completely unaccountable, irresponsible, can’t get fired for messing the country up bureaucrats and their political masters are 100% responsible for this.
Yeah, the proles want free stuff so the politicians will oblige. What the hell, they don’t need to worry, after 6 useless years on the job, they get pensions that kings would dream of, paid by your working stiffs.
When you look at any industrialized country, its the same damn thing.
You get the feeling that the ruling class wants to get everything they can because they can see the end coming. The leftovers are for the plebes.
The well of plenty is prohibited from production.
Phantasy of wealth in nothingness is the rule.
L – An axiom in clinical psychology is that neurotics build castles in the sky and psychotics try to live in them.
Socialist politicians build “social” housing projects that no one wants to live in. If they can help it. Marxist politicians devise social housing schemes that make home ownership impossible for the native born average person or family. But in both cases, the political elite and oligarchs get to live in castles paid for by once free citizens turned into peons and serfs. I wonder if there is a road to serfdom that can be avoided ?
A shortened version of Hayek’s book once published in the Reader’s Digest.
https://cdn.mises.org/Road%20to%20serfdom.pdf
Problems, crises; for the clerisy these mean job security, and increased budgets.
Therefore, the only job of any bureacrat, the world over, is the manufacture and infinite continuance of problems/crises. Until you learn this lesson, you will always be shocked and disappointed by the actions of government.
For proof, refer to the decades long “homeless crises” in California, Oregon, BC, Toronto, … . The growing “homeless problems” in red shifting Austin, Florida, … .
New Zealand
– 268,000 km2 area
– 5 million people
Taiwan
– 37,000 km2 area
– 20 million people
Why does NZ have a housing problem?
Governments in all western countries have been slowly lowering interest rates since 2008, in order to keep the game of musical chairs going, as incentives to borrow and spend, to keep the economy “moving”. The real problem though, is regulations and taxes which stifle growth.
The longer the game of musical chairs keeps going, the more painful the unwinding will be, when it happens. In the meantime, many of us face the irony, of owning a modest million dollar valued home, while our adult kids can barely afford rent.
Governments are now partners with citizens, going head over heels in massive debt. Many predict the end, comeuppance, black swan, call it what you will, but it will come, and central banks will have no tools to stop it.
They think they can fight inflation without raising rates. That will be interesting to see. In the meantime, we are told gold is passé, and Bitcoin is inflation protection…….so we shall see.
Kiwi’s – current holders of the America’s Cup AND The Giant Nut. How could they do wrong?
Interesting. Have an offspring who wishes to switch from apartment condo to own home, and we’re all involved. Right now, are backing off and waiting to see what’s going to happen in the spring. Sad for the sellers, but really hope the bubble bursts so offspring and others in that position can find decent homes to buy.
What has been the modern governmental miracle development in economic theory? Something called Modern Monetary Theory https://www.investopedia.com/modern-monetary-theory-mmt-4588060 will not create inflation.
Try buying a house, dentistry, insurance, a loaf of bread or even a beer these days. No inflation? Just ask StatsCan, they’ll tell you. Of coourse they fix the numbers worse than a climatologist.
MMT is post-modern economics. Go woke; go broke. These bastards are screwing it up for all of us, but not them, who sail on a sea of government pensions and subsidies.
The main problem for the elite is to maintain a certain level of consumer demand: Amazon needs customers as well as cheap labor. Basically the anithesis of Henry Ford who thought every employee should be able to own one of his cars.
Hence Universal Basic Income, or as it use to be known, slave rations.
Trudeau was hoping that the Bank of Canada would give him free reign of just issuing debt for this UBI.
Now that he’s been cut off, I really don’t see that happening.
“Sad for the sellers, ”
This is a fallacy, it is not sad for the sellers unless they are planning to be homeless after the sale. With bubble prices they have to buy a new house at an equally inflated price. So they save nothing. Sure if they downsize, i.e. if they decrease their standard of living then they save. That is why Chinese slavers buying real-estate in the Western World are not investing or bringing capital, they merely pricing locals out of the market.
Does ZIRP cause skyrocketing housing prices?
The interest rate in PEI is no different than in the GTA, yet the median house price in the GTA is about 3 times higher. Clearly there is something else at play.
Put in a nutshell it’s the imbalance between supply and demand which causes housing shortages. Governments restrict supply while increasing demand concurrently resulting in sky-high prices.
Immigrants serve as the convenient whipping boys for the economically illiterate.
“If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.”
Milton Friedman
It’s very cute for Kate to pretend to give a ZIP about ZIRP now that Trump is beat and done. Couldn’t have cared less while he was in office crying for Powell to lower interest rates for him.