We need to know just who home buyers are

Property housing data could reveal what is driving housing inflation in places like Dunedin. PHOTO: GETTY IMAGES

The state of our housing market is crucial to our economic wellbeing. This Government has abandoned plans for a capital gains tax. Its reasons are very pragmatic from a political perspective. But it leaves it bereft of any real policy achievement , aside from banning plastic shopping bags and the creation of numerous task forces and working groups.

Hardly an impressive political legacy. Modern democracy seems to have evolved into a system where gaining and maintaining power is more highly prized than developing and implementing meaningful policy.

We live in a data-driven age. Social media is a guise for a massive gathering of our personal statistics. We willingly submit our personal preferences to anonymous data gatherers with numerous daily searches from fashion to dating to music to social and sexual tastes.

Yet we still lack accurate real-time data about who is buying our houses in New Zealand. House prices largely dictate the state of our economy. Such data is crucial to understand what is happening in our housing market and our economy.

This data could reveal much meaningful information. It could reveal what is driving housing inflation in places like Dunedin, Wellington and various other parts of the country. The media talks about a "halo" effect. Supposedly the slowing Auckland housing market is leading to more investment buying in other regions. But the evidence for this is purely anecdotal. It is just a story.

Accurate real-time data could reveal if the Auckland housing market is following its counterparts in Sydney and Melbourne. Both of these cities are experiencing double-digit housing deflation. Such a development could render KiwiBuild a costly irrelevance.

Good public policy needs good data.

We need accurate immediate information about what is happening in our housing market. This information would be easily obtained. It should reveal the demographics of buyers. Whether they are local or international. Whether they are investors or first-home buyers; whether they live locally or in other parts of the country.

Data drives modern economies. The private sector has quickly appreciated how important accurate real-time data is to capturing consumers. In this information age, timely, relevant data can be a crucial source of economic and political power. Yet we still don't know who is buying our houses. We rely on anecdotes to create fables about legendary hordes of foreign buyers or "the halo effect".

Up-to-date real-time information about the nature of buyers in our housing market would provide an informed basis for policy decisions.

It would also allow buyers to be more informed when making one of the most crucial financial decisions in their life. Housing inflation has been a huge driver of economic activity in recent decades.

Yet strangely we lack the resolve to ensure we have meaningful independent data about what is happening in the market. Relying on the banks or real estate sector to supply independent data is bizarre.

They have a powerful vested interest in their lending and selling practices.

Yet bankers and real estate pundits are generally the "go to" sources for media comments on the state of the housing market. Car salesmen are seldom quoted about the best time to buy a car.

The Labour Party made a complete hash of this issue while in opposition. It used a blunt list of buyer surnames to infer that many house buyers were Chinese in origin. Now that it is in power it could easily rectify this serious information vacuum.

Real estate firms could be legally required to complete a point-of-sale survey that identified information about individual buyers, regardless of company or trust fronts.

That would be a policy achievement that would outrank the ban on plastic bags.

- Peter Lyons teaches economics at St Peter's College in Epsom and has written several economics texts.