Mr Key effectively ruled out any changes in immigration policy to tackle price rises in housing in Auckland, indicating he favoured possible action by the Reserve Bank to make it tougher on property investors. He said-
“It might be an idea. I think those alternative tools in the toolbox are much better than blanket and wholesale rises of the interest rates which wouldn’t be justifiable given where inflation is at the moment.”
The Prime Minister blamed the high prices on the artificial boundaries of the metropolitan urban limit, and pointed out that the Government had fixed this by allocating special housing areas. He said the average price in the new boundaries was more like $750,000.
So now he proposes more “artificial boundaries” by means of some obscure Reserve Bank plan.
Frankly I think this is weak apologetic garbage. Mass immigration into Auckland, for the purpose of driving the National party’s economic plan, has driven house prices into the stratosphere, and put enormous pressure on services. Rates are rising because the council needs to rush to build infrastructure in an attempt to cope with the influx.
Official data shows an intake of deep-pocketed mainland Chinese has helped New Zealand reach its highest number of immigrants in more than 10 years, and most of the increases have occurred in Auckland. New Zealand’s net migration surged to an 11-year high of 31,900 in the year to March 2013.
Key needs to face the reality that his plan to boost NZ’s economy by mass immigration is just not sustainable. We need real investment in real projects, not just the unproductive churn of real estate sales, and that won’t happen until we deal with a government that is too big and a regulations regime that is out of control. This is the only way we get out of the debt disaster that consecutive socialist governments from the 80’s onward have created.
Key’s belief that we can get back into the black by a continuous stream of immigrants is a twofold mistake in that it doesn’t produce any real economic gain and destroys our native culture.
Remember that “Kiwi kulture” that we all used to talk about a few years ago?? Apparently, all of a sudden, it has no value at all.
TrueblueNZ 
Oh look. $750K isn’t that much for a house. If bludgers quite whinging and started working the problem would go away!
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Oh, bullshit, Berwick. A lot of people who work damn hard find house prices rising faster than they can save.
You’re very good at slagging off working people (including doctors, nurses and firemen) but you’ve never said what you do for a living.
How about telling us, since you reckon the categories I just mentioned are bludgers?
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Anyone whose income derives from my tax dollars is a bludger – period. And yes ACC levies, Kiwistealer, road user charges, WOF fees, car rego fees, rates, mandatory rubbish collection charges, rubbish bag prices, stamp duties, taxes, costs of “professionals” protected by state licensing — they’re all taxes!
Paying $750 only needs one income at $250K, or a couple say on only $150K and $100K. Not a problem.
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And still the question goes unanswered…..
You’re a person of big mouth and low integrity, ‘Sinner’.
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I think some RBNZ action (perhaps targeted on investment properties, however they define that) is a good idea. Not the solution but part of it. This would leave the RBNZ able to adjust the OCR to deal with inflation and general business conditions without having to worry about the Auckland house prices. Also, a higher OCR (than otherwise necessary) will push our currency up as foreign money searches for yield and piles into NZ.
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Right. Because let’s see, bludgers in those “investment properties” deserve to pay more in rent, right?
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Funny thing is its not going to be much different to legislation proposed by Colin Craig that received such heavy criticism from so called free marketeers. I’m against the reserve bank completely and I am against any govt regulation of the economy. Its always self defeating.
This is a much deeper problem and needs more solid solutions than mere tinkering by govt bankers.
The bottom line is immigration is not the silver bullet to debt and or other economic problems Key and English think it is.
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“Auckland house prices surged 13 per cent in the last month alone and are up $83,000 annually, according to REINZ’s latest figures.”
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Why the hell would anyone invest in anything else?
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Exactly. And that’s a big problem.
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House prices are rising faster than the average income after TAX, even if you saved your entire Income you would still be falling behind.
Really good for those of us with our own properties?
Not really it is a fools paradise.
The only thing the Government should do is bring the super shitty city Council under control this mess is entirely of their making.
Any other meddling will have unintended consequences.
The market has to correct itself this lunacy cannot continue for ever.
So you have begged borrowed or stolen a $100,000 deposit and borrowed $500,000. Interest rates go to 20%-22% don’t think so check out the 1980″s that’s $100,000 interest per year.
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Exactly so, Mr. Blobby.
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As you highlighted in a previous post Reddy, National has created a smoke and mirrors economy. To maintain the illusion of growth relies on ever decreasing rates of interest, ever increasing immigration and ever increasing borrowing.
When economic reality hits this Alice in Wonderland type existence, there will be blood on the floor. Why can’t people see what is staring us in the face?
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