So is true after all, that New Zealanders are lazy bums? Maybe as bad as the greek? Ouch, that hurt… Well, let me explain this by investigating the housing market. Some may remember the big headline in the herald around 2006, when the cover story was a private Auckland property selling for over NZ$1 m. Back then it seemed like a whimsical one-time-thing. But who would have thought?
Less and less Kiwis are home owners
Nearly ten years later, chances of finding a home below the one million mark in Auckland are below 50 percent. Since there was no mentionable increase of millionaires in Auckland, it seems the exception is finding an affordable home. Actually, all of the main centres in New Zealand had their housing prices bumped up a notch. The Christchurch earthquake added some insanity to rental prices by offering short-term for up to NZ$ 1,500 a week. Apparently building companies could afford this, so the law of the market (we’re all familiar with) is the only argument to reason. The number of New Zealanders owning their own home has dropped below the 50 percent mark and all signs show that it is spiralling further down.
By 2020 only 23% of Kiwis are estimated to own their own home. One of the main reasons seems to be the crackdown on mortgage lending in 2013: When banks realised they were giving out loans to easily to people. Well, good on them to secure their business, but was this really necessary? How many loans ended up unpaid in NZ?
Is New Zealand the USA or any European country? No, it’s not Greece, it’s by all means, not comparable. However, the New Zealand government wants a piece of the international cake of wealth by opening it up for competition. Hence foreign currency flows in to dry out the social landscape of NZ.
While housing-bubble burst a few years ago overseas (and they will pop again in Europe as it seems) things are just starting to get bloated in New Zealand. Yes, New Zealand will have more rental properties, more demand for it and therefore higher rental prices. Easy to see that this is part of a spiral going up – including, of course, house buying prices as there’s more money to be earned with a rental home nowadays.
Some solutions on how to get your own home
Here’s some solutions banks and property investors deem viable: save more, move to cheaper areas, move to the countryside, DYI. Essentially: get out of the way and cut down on your lifestyle.
The most concise and apposite remark was made by a Chinese investor: Kiwis, stop grumbling and work harder. Well, this guy is right because he speaks in terms of a “free market”. He speaks for an overseas reality that is hitting New Zealand hard: economic competition. In this type of competition elbows are being used; it’s about money, it’s about “getting your ass to the wall” as my granddad used to say. It’s about spinning that wheel faster, faster, faster…
Just have a look for yourself how healthy this type of competition is for society: China and its property bubble of 85m houses staying empty while Foxconn-workers taking their lives. Germany, getting back to its own dark ages because the country is rich but its people underpaid: pegida. The USA, getting hit by global competition in Detroit or its incarceration rate, driven by an inhuman attitude where everything is business.
It’s not a Chinese problem, it’s exploitation and accepting it
After all, it is not Chinese people to blame: It’s not a Chinese thing, it’s homemade by the government. It’s the belief in an already failed system of greed instead of a healthy capitalism. The fact that overseas investors can buy – even if they are not residents is disturbing. Because it allows the immigration of social attitude into the country that is destructive. We’re not talking about immigrants here: they are required to be of good character – to be at least fitting into society. We’re talking about capital and its spirit. Capital is not money, it’s the things you have to produce goods and a lifestyle.
If we allow people to commercialise private homes, we take the essentials out of our (the parliaments) hands: the most private of assets, a roof over one’s head. Subsequently a landlord is calling the shots whether you can stay or not. Well, I think you can stay – as long as you’re prepared to work harder.