By David Hargreaves
A message to the Government. As it has been said by a rather successful sporting goods manufacturer: Just Do It.
The Government has long since lost any credibility on the subject of finding out more information on house buyers and where they come from.
Time to open up the box and see what is inside. Start collecting detailed information on house buyers and end the hysterical nonsense we are now seeing.
Advice given to the Government has shown that it would be doable to collect information on the immigration/residential status of house buyers. So, just do it.
Okay that same official advice to Government cast doubts on whether it would be worth doing it – but I suspect that might have as much to do with Treasury realising the Government was against the idea as anything else.
Since first joining Interest.Co in 2013 I’ve been banging on about how detailed information on house buyers should be collected and I know plenty of other people have too.
The Government’s attempts to close the subject down by saying it doesn’t see foreign buying as an issue have long since smacked of a Government that doesn’t want to leave itself open to revealing a problem – because then it would have to do something about the problem.
But to continue existing in a vacuum of information as we are is simply ridiculous.
If credible, official, figures are not produced then the very thing we are now seeing is bound to happen. People create their own reality.
Would we give much credibility to any measures the Government implemented around inflation, if we didn’t have Statistics NZ measuring inflation? Likewise, would any state moves on employment carry any weight if we didn’t, similarly, have detailed measures in place monitoring the labour market?
Housing is very important, so let’s know the demographics of the house buyers.
Any Government policies that deal with the housing market would be much more informed ones if proper information was available on where the property owner lives, and the reason for the purchase, IE whether it is as an investment or to live in.
The recently announced moves that will include collection of IRD numbers and requirement for foreign buyers to have an NZ bank account will provide some more information. But it is an around-the-(sorry)-houses way of doing it.
The Government should right now say that it is going to require details of the residential status (and location, if offshore) and the purpose of buying to be entered on house purchases/land transfers.
Collect the information.
Then, 12 months down the track, let’s have a look and see what the information tells us.
Of course, if the information does tell us that a very large percentage of Auckland houses are being bought by people offshore then it will behove the Government to come up with an appropriate response.
And clearly that would be tricky. But confronting tricky situations is something a Government should do.
At the moment this Government simply doesn’t want to find out if there is a problem. It’s the classic response of authority. Treat a problem by refusing to acknowledge its existence. In this instance it’s even worse because the Government refuses to even carry out research that would enable it to know if there’s a problem or not.
As for the spurious reasoning that there would be not much value in collating this information. No, I’m not having it.
There would be great benefit in better understanding the demand-side dynamics of the Auckland house market. For example, if it is possible to identify large numbers of overseas buyers, and directly identify local investors (and, yes, progress is being made on that one), then we can better understand how the market might be affected in future.
It won’t have escaped anybody’s attention that the Chinese stock market has been going through a rough time. Would this have the potential to quickly reverse buying interest in the Auckland market? Could the rural-driven downturn within New Zealand have a marked impact on the number of Kiwi investors in that market?
As I’ve said before the Government has kept driving on about the Auckland housing situation as if it is all about supply.
Clearly, that’s an issue. But so is demand. Right now demand is high. But if we knew more about who is buying houses we would have a better idea of knowing how genuinely sustainable the current levels of demand are and what further steps might be needed to insulate ourselves from a sudden reversal of demand. Because I do think there’s a serious risk of that in Auckland. And the people most at risk would be owner-occupiers with mortgages.
So, Government: Get that information. No more delays. Just do it.