Comment
Labour's contentious "housing map'' released last week may not have captured the public attention it deserved, but it keeps the housing debate in the forefront of discussion.
While there are demand issues with migrants and first-home buyers, high on the target list for Labour and National are foreign and domestic investors, who might yet bear the brunt of increasing restrictions during the next 18 months.
With the myriad facets of housing, be it prices, supply constraints, construction costs, state housing, council red tape, homelessness or renting, housing is destined to be a front-line issue in next year's election.
A former Reserve Bank chairman recently suggested policy-makers cause a 40% house collapse to drag Auckland's median price down to back to around $500,000, handily overlooking the negative equity chaos inflicted on thousands of ordinary New Zealanders.
Opposition leader Andrew Little claimed the housing map revealed more than 98% of New Zealand was affected by the housing crisis, while Building and Housing Minister Dr Nick Smith responded that Mr Little had overstated the housing challenges, labelling the blended statistics "riddled with errors and misinformation''.
There's no small irony in that in the lead-up to the previous housing bubble, which peaked in 2007 and was followed by the global financial crisis 2007-08, Labour was in the driving seat, lauding surpluses, but subsequently not having to deal with the GFC fallout.
Twelve years later, house prices have gone into hyper bubble territory, monthly eclipsing the 2007 records, but with National at the helm and struggling to deliver a definitive solution.
A saving grace this time may be banks being in better financial position to ride out the bubble risk, as they have so far done with the debt-laden and ailing dairy industry, which has not yet seen a run on firesale farm prices.
There are, however, dairy farmers quietly being prodded to walk the plank, just with less use of the alarming "mortgagee sale'' signage.
The families and investors readily spilling from overpriced Auckland have taken the demand problem to other centres and regions, creating mini-booms - be it high-priced Queenstown, swelling prices around Central Otago and even Dunedin's student rental market.
In his housing map, Mr Little singled out investors, with a promise to "crack down on offshore speculators'', while also building 100,000 affordable houses, plus emergency and social housing.
Under National, the Reserve Bank has brought in loan-to-value ratios on lending, requiring larger deposits, and beefed up tax law, with capital gains tax for people selling after less than two years' ownership.
Some banks have already put mortgage restrictions in place to limit foreign buyer entry.
More disincentives targeting investors are expected from the Reserve Bank in the near future.
While the Queenstown Lakes housing area often mirrors Auckland in pricing extremes, and is at present less affordable than Auckland, as measured against income and interest rates, much of wider Otago is showing only relatively small pricing gains.
That said, it is still tough times for young, Southern, first-home buyers.
However, their first home $200,000-$300,000 mortgage headache pales somewhat to that of their counterparts in the north where first-time mortgages are $400,000-$600,000 and beyond.
Given New Zealanders' poor savings record, and generational love of bricks and mortar as their retirement planning, housing is unsurprisingly the favourite long-term investment.
Speculation is the Reserve Bank's present loan-to-value restrictions covering Auckland could be extended across the country, essentially following the wash of investor cash across the regions.
If, as speculated, the Reserve Bank increases the capital gain period to five years, that will test the stomach of Auckland investors tying up their largest investment in Dunedin or Queenstown for such an extended period.
However, there's another irony.
Investors in general are counselled to hold most assets with a mid to long-term view.
The release of other housing data on Friday, highlighting five regions hitting new annual median record prices for June, including Otago and the Queenstown Lakes region, show there is no let-up in sight.
Labour and National's respective polling success may well hinge on their policies addressing the investor stain on the housing sector, without alienating first-home buyers and families.
