Housing prices. As just about everyone reading this should be aware, we have a problem. As of May 2015, the average house price in Auckland was $828,502 NZD, an increase of 5.4 per cent over three months, 16.1 per cent over the course of one year, and a whopping great 51.6 per cent increase since 2007.
Now, before everyone collectively groans “not another bloody housing article!” and quickly closes this window, I’d just like to say that this piece of writing here isn’t so much about housing – it’s about the root causes of the problem.
House prices are a big problem, and everyone in politics has some sort of drum to beat about them. The National government are happy to deny the crisis exists, as the growth in the Auckland housing market is one of two factors keeping the economy moving, the other being the Canterbury rebuild.
The Labour Party are happy to harp on about how terrible the prices are and how a Labour-led government would be a silver bullet to fixing housing and all our woes, despite the fact they technically have no policies anymore. They’re the major opposition party, and to them it’s oxygen. They just want something to complain about.
And then of course we have New Zealand First, happy to blow the anti-immigration whistle again, and even happier to say that if only we’d listened to Wise Uncle Winston back in 2002, we wouldn’t be in this mess. Technically, they have a point. But then you have to ask, if it was so important and obvious even back then, why didn’t they do more about it when in government with Labour from 2005-2008?
Finally on the list of parties worth mentioning, we have the Green Party. The only major party still to have a capital gains tax among their policies, yet who for some reason haven’t managed to find some kind of unique drum to bang on the housing crisis. Following a half-hearted, following-in-Winston’s-footsteps attempt to talk about overseas investors during the election campaign, they appear to have limited their response so far to criticisms of Labour and National’s attempts/non-attempts to address the crisis.
So in that list we have one party with a vested interest in keeping the crisis going, one party wringing their hands and complaining while offering no solutions, one party actually getting relatively close to the cause of the crisis, and one party who haven’t realised they’re holding a very large and fairly unique drum to bang. What is this drum, you may ask?
Housing prices have skyrocketed in recent years, largely due to overseas investment in our property market. NZ First have got that part right. A lot of that investment is coming from relatively few affluent Chinese investors, as evidenced by the recent news that around $10 billion NZD is in the process of heading towards the Auckland property market from China – around 3.3% of their loosened capital.
What a lot of people have failed to realize though, is that affluent Chinese are most often connected to the Communist Party in some way – either through family links and influence, or for business interests – and the Communist Party is naturally very keen to see their overseas business interests expand and succeed. Therefore, they like to provide investors and businesspeople with advice on possible long-term problems. And at the moment, the Communist Party’s Central Committee is very concerned about a certain issue the Green Party are also very concerned about.
That issue is climate change. They are very keen for their long-term business interests to avoid damages from climate related issues, therefore they like to invest in climate-resistant assets such as property and housing. And luckily for them, close by is a country with lots of cheap land (by their standards), with relatively few foreign capital controls, who also happen to be ranked number two in the world in terms of how well positioned they are to adapt to a world with a changing climate. That country is New Zealand.
So there we have it – the Green Party can bang the climate change drum as the root cause of the housing crisis and foreign investment, and New Zealand First can bang the foreign investment drum. And as these two issues are suddenly tangibly linked, could this be a starting point for greater co-operation between these two parties? Could this, feasibly, form the basis for a joint NZ First-Greens campaign to work together in government following 2017? Or will one or other of these two parties use this to devour the other?