“Housing in Auckland is extremely unaffordable”

Is it?

Let’s allow?Shamubeel Eaqub to make his case

The latest Demographia International Housing Survey confirmed what we know – house prices in Auckland have risen much faster than incomes. So much so, that Auckland is the fourth least affordable city in a survey of 92 cities around the world.

The causes for the housing crisis have been well covered. Housing supply is too slow because of ineffective regulation, while demand is too high because of our culture, tax incentives and bank lending biases towards existing homes over new builds and businesses.

Similarities across some markets around the globe show that the drivers are not necessarily unique to New Zealand, but often the underlying causes are much the same – the economies are successful, populations are growing, and home owning and investing cultures and housing supply is unresponsive.

But some historical context is also helpful.

The increase in house prices relative to incomes is not new. It started to diverge in the 1990s. Unsurprisingly home ownership peaked then, after rising for nearly a century, and has since fallen to the lowest level since 1956.

Extremely unaffordable housing has had the expected consequences: increased homelessness, housing stress for the poor and vulnerable, and slipping hopes of middle classes ever owning their own home.

Unaffordable housing hits the poor the hardest – they face higher costs and often get shunted further away as suburbs gentrify. Lack of investment in social housing has meant that we have fewer state houses today than in the early 1990s, and relative to population, the lowest number of state houses since the late 1940s. Read more »

Is Hillary getting advice from Andrew Little?

Andrew Little has rejected the centre ground, and Hillary Clinton it seems has no idea what the middle class is.

When you sit atop a $62 million net worth, it?s hard to see all the peons below. However, Hillary Clinton has reiterated throughout her campaign that she is going to really help out the middle class and not raise taxes on them. But when a reporter asked what income range she?s talking about, Clinton took the long way around with her answer.

Clinton was asked to define the middle class ?numerically? and also ?philosophically,? and so, she began there, touting it as the ?social, economic engine of our country.? Also, it?s ?a reflection of the success of the United States from the very beginning,? Clinton added. ? Read more »

?GDP up” just the war cry the CTU was waiting for

Just when the economy is going gang busters along come the unions with their bludging, grubby hands out.

The latest figures show gross domestic product (GDP) grew 0.9 percent in the June quarter, taking annual growth to 3.6 percent.

Driven by housing, strong demand for exports and immigration, New Zealand now has the third highest growth rate in the OECD.

However, how much of the increased growth is getting through to workers?

ANZ chief economist Cameron Bagrie says any growth flows into the economy and eventually into wages.

“If we continue to see unemployment track down, wages will start to move up and people will start to get ahead.

“We’re seeing real wage growth at the moment of 1.5 percent, but I’m expecting that to grow to 2.5 percent over the next 24 months.”

However, critics say we’re relying on immigration and on a per person basis New Zealand’s hardly growing at all.

“The biggest disappointment is the fact that it’s driven by population growth rather than by increasing the quality of what we are doing. Our productivity growth is probably going backwards,” says CTU economist Bill Rosenberg.

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How to explain economics to a Liberal


Unintended consequences always undo policy objectives

Rodney Hide explains in the NBR:

Too often we evaluate government policy by what politicians say they are trying to achieve.?That?s what gets reported.?That saves having to think.

But good intentions are not enough.?It?s actual results that matter.?And politicians may mean well but still prove a disaster.

To rely on what politicians promise is to be continually misled and let down.?We need to see what their policies will actually deliver.?That requires we think and apply a little bit of economics.

In 1999, the Labour Party won votes saying it wanted to reduce the burden of student debt.?The intention was lauded.?The policy was to drop the interest charge on students to zero.

But free loans created the incentive to borrow more, not less.?Students who didn?t need a loan could make $3000 while completing their degree simply by reinvesting their free money back with the government.?The incentive for students is now to borrow whether they need the money or not.

Officials advised the new Labour-led government that free loans would add an extra $600 million to student debt within two years.?The effect was as predicted.

Within the year the proportion of eligible students who borrowed jumped 10% and the amount the borrowed jumped on average per student 23%.

The loan scheme?s administrators concluded, ?The increase in borrowing in 2000 can be attributed to the change in the interest rate write-off policy, which reduces the cost of the borrowing.?

The free-loans-to-students policy produced the opposite result to what politicians promised: student debt went up and the debt burden on students increased.

The intention was good.?The outcome was lousy.?Students are now more indebted than ever.

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The real reason behind the UN’s continued scare campaign over global warming

Here is a clue for you…the UN isn’t interested in saving the planet from a non-existent threat, it is actually interested in controlling the planet, and one of their top officials has proved it.

The alarmists keep telling us their concern about global warming is all about man’s stewardship of the environment. But we know that’s not true. A United Nations official has now confirmed this.

At a news conference last week in Brussels, Christiana Figueres, executive secretary of U.N.’s Framework Convention on Climate Change, admitted that the goal of environmental activists is not to save the world from ecological calamity but to destroy capitalism.

This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time, to change the economic development model that has been reigning for at least 150 years, since the Industrial Revolution,” she said.

Referring to a new international treaty environmentalists hope will be adopted at the Paris climate change conference later this year, she added: “This is probably the most difficult task we have ever given ourselves, which is to intentionally transform the economic development model for the first time in human history.”

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The problem with ‘ethical investing’

Yet again the Green party is lecturing us on ‘ethical investing’.

Can anyone see a problem with that?

The Green Party has called for the New Zealand Superannuation Fund to quit its investments in companies producing fossil fuel.

The fund’s chief executive, Adrian Orr, said it took the issue of climate change seriously and expected its exposure to fossil fuels to fall over time, and investment in renewables to rise.

“But a simple divestment call? The world is just not that straightforward,” he said.

The fund, set up by the previous Labour Government to partially pre-fund future New Zealand Superannuation payments, had $676 million invested in companies directly involved in fossil fuel production as of last June. That represented about 2 per cent of the fund’s assets.

Greens co-leader Russel Norman, in a paper released yesterday, makes an ethical case for not investing in companies whose activities are literally fuelling potentially catastrophic climate change.

He also points to a financial risk of stranded assets, citing analysis by the International Energy Agency and other bodies that the world’s coal, oil and gas companies already have in their proven reserves at least three times as much carbon as can be burned without exceeding the internationally agreed target of limiting global warming to 2 degrees Celsius. ? Read more »

The take down of Piketty

The left-wing loves Thomas Piketty, but it appears that like most socialists he has lied about and massaged the data that he uses to make all sorts of claims that the luvvies of the left are all wetting their knickers over.

Tom Woods discusses the major errors in the Piketty book.

As one commenter says:

The main problem is not Piketty’s thesis but the fools that take the thesis as gospel and then either influence those in power or come into the position of controlling the levers of power to implement Piketty’s?ideas. With that said,what happens when the “rich” refuse to pay Piketty’s suggested worldwide taxes? Or for that matter “shelter their wealth.” In the end Piketty’s ideas are not based on logic,reason or “human action” but strictly on a monopoly on the use of guns and force.

Listen to the discussion and be fully armed to counter the leftist arguments based on Piketty’s hallucinations.

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Cheap weed in Washington State after legalisation causes glut in supply

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Washington State legalised cannabis?and in the first year growers rushed to market hoping to make a killing…predictably there was an over supply and prices dropped through the floor.

Have you ever been tempted to buy your dog a truckload of steaks just to see if there was a limit to how many of them they could eat at just one sitting? Well when marijuana became legal in the state of Washington, we were similarly?curious about whether there was?a theoretical maximum amount of pot that its residents could smoke? and now our questions have been answered.

The Associated Press, via ABC News, reports that marijuana sellers in Washington are actually suffering from large unsold?surpluses of pot, as supply is now vastly greater than demand for the demon weed inside the Evergreen State. ? Read more »

Labour in the UK declares a crisis in energy…problem now solved

Oh dear lord, it seems Ed Miliband has David Cunliffe and the NZ Labour party advising them.

They are even mimicking declaring a crisis for particular industries and just like in New Zealand they have tried to come up with their own power solution.

It has of course been widely mocked.

Labour?s flagship energy price freeze was branded ?a joke? last night, as senior figures in the party confirmed it has been reviewed in the light of falling prices.

The price freeze, which Mr Miliband pledged would last until 2017, has been thrown into turmoil in recent weeks as a slump in the price of oil saw the prospect of falling energy prices.

The Daily Mail revealed yesterday that Labour is conducting a U-turn on the policy, which was launched by Ed Miliband in 2013.

It has now been ?re-branded? as a price cap, which will allow bills to fall to reflect tumbling wholesale prices.

Yesterday E.On became the first Big Six firm to offer a cut in gas prices of 3.5 per cent to its customers, and others are expected to follow suit.? Read more »