4 ms·

Everyone in New Zealand is struggling unless you've been there for 10-20+ years (when you could still afford a house) or you're an immigrant who sold a house in

by jmyeet 1y ago

Everyone in New Zealand is struggling unless you've been there for 10-20+ years (when you could still afford a house) or you're an immigrant who sold a house in your home country and thus you can afford a house. The average wage in NZ is NZ$61k and the average house price is NZ$908k. This is absolutely unsustainable. This same pattern is playing out to various degrees in Australia, the UK, pretty much anywhere in Europe (certainly Western Europe), Scandanavia any any large city in the US. And as far as I can tell there's absolutely no serious political opposition to any of this happening in any of these countries. None. Your political choices are between the extreme neoliberalism with lots of racism and the slightly milder neoliberalism with slightly less overt racism. This is all capitalism working as intended. Every part of this is a series of intentional policy changes designed to transfer wealth from the poor to the ultra-wealthy. Housing is being hoarded and artifically constrained in supply. People are being loaded up with student debt, medical debt and mortgage debt where we careen ever closer to the South Asian brick kilns.

reactordev 1y ago
So what you’re really saying is NZ is for sale…
- alephnerd 1y ago
  All countries are if you're VHNWI ($5-7M minimum) or on a skilled visa. Plenty of options open up for skilled visas with somewhat expedited naturalization.
  - wordofx 1y ago
    No. Most of Asia can’t be bought. Foreigners cannot own property in lots of Asian countries.
- hcfman 1y ago
  Yeah sure, didn't Peter Thiel buy a chunk of it ?
lotsofpulp 1y ago
> Every part of this is a series of intentional policy changes designed to transfer wealth from the poor to the ultra-wealthy. No, it is a transfer from those who don’t own land to those who already own land. Roughly correlates to young/poor/immigrant classes transferring wealth (or maintaining wealth disparity) to older/richer/beneficiary classes. That is why it is politically popular. Low and flat land value tax rates have always enabled this, but their effects were temporarily masked by the population boom allowing a lot of upward movement in the lower (non land owning) classes due to broad economic growth.
energy123 1y ago
It's got little to do with the ultra-wealthy, who have their wealth in equity. The problem is the upper middle class who have their wealth in land. They are 30% of the population and command election outcomes against anyone who tries to change the status quo. To them, the housing crisis is a housing bonanza and they plan on keeping it that way. I also take issue with buzzword "neoliberal", as if leftists would be any better with their rent control, NIMBY tendencies, and ideological hostility to supply-side policy (see Dean Preston in US, Zohran Mamdani in US, Adrian Ramsay in UK, Chandler-Mather in AU). In my estimation, they would be worse than any "abundance neoliberal", who at least have Austin, Texas as a successful case study they can point to, and who have ideas that make logical sense. The problem is not their policy ideas but the political reality they exist in where they're constrained in what they can do by a politically active plurality (landowners) that wish to persist the status quo.
- bjornsing 1y ago
  There’s some truth to that, but I think it’s even broader. Here in Sweden there’s a widely understood term (”bostadskarriär”) that roughly translates to ”housing career” and refers to building wealth through home ownership. It’s often more important to your financial success than your actual career, even for the working class. All this is due to regulations of course. In Sweden its a combination of tax rules, laws around borrowing, zoning regulations and construction standards that has kept the gravy train rolling. It’s a bit hard to see how it could continue though. Feels like it could come crashing down at any point. On the other hand: I’ve had that feeling for 15 years. EDIT: Monetary policy is the big one actually.
- xkcd1963 1y ago
  I'm sorry but rent control is what we need lest you want more occupied housing.
- Workaccount2 1y ago
  Thank you So tired of people talking about the housing crisis as if megacorp is the one buying all the houses to drive up prices. Yes, commenter, they do buy homes, but by far the single biggest player is regular people. They both are getting rich of the system and voting to keep it in place. Even worse though...houses are still being sold at these insane prices. There are still fresh dual income high earning non immigrant non billionairs childs non megacorp investor regular people still coming up with the money. I don't know whats worse, never being able to afford a house or seeing people you know (or thought you knew) somehow getting into one. And then voting down any build out initiative that would weaken their investment.
beachy 1y ago
Good rant but a bit of a simplification. NZers love to go off and do their OE (overseas experience) typically in their early-mid twenties often in hubs like London. A kiwi in their 30s who hasn't lived and worked overseas is the odd one out at parties. Many of those people do extremely well. I know several who made millions in banking and IT. Then they come back to NZ when they have kids and put that money into housing. These are some of the people paying $3M for a house. Others are people who have inherited wealth from their parents who invested big in NZ property last century (e.g. boomers). Others are wealthy immigrants from UK, SA, US even. Yes that sucks for the local who has only been earning $61K but it's reality. Add to that a weird situation where there is no capital gains tax on housing, with all political parties too scared to address that giant elephant in the room, and NZ offering an awesome lifestyle in many ways except for salaries, and and you have a perfect recipe for high house prices. Is it sustainable? My view is that it is (not in the sense sustainable == good, but in the sense sustainable == can keep going for a long time). There's no god given right to affordable housing. There was a period in the 1950s where there was prosperity for all, but looking back, that was the anomaly, not the current state of affairs.
- jamesblonde 1y ago
  Sounds exactly like Ireland of like 25 years ago.
- niemandhier 1y ago
  Currently in many countries the social contract stipulates that the majority of the population refrains from voting for a system that confiscates the wealth of the top 5% and in exchange their lives are bearable. Trump promised to address the problems of low wage workers, and in many places jihadists style themselves as social reformers. Since NZ does not have the luxury to blame it on refugees or neighbours, I don’t think it is sustainable.
- markdown 1y ago
  > There's no god given right to affordable housing. Sure, but if you take everything and leave nothing for the masses, sooner or later they'll make your life miserable too. Whether that happens with regular ole crime, or revolution, one way or another the scales will be balanced. If you want a comfortable life in your mansion, you'd better make sure that your butler and doorman can afford comfortable homes of their own and a decent standard of living.
deleted 1y ago
[deleted]
petesergeant 1y ago
> This is all capitalism working as intended Supply constraint of housing by rent-seekers who have managed regulatory capture is absolutely not capitalism working as intended.
- graemep 1y ago
  > Supply constraint of housing by rent-seekers who have managed regulatory capture is absolutely not capitalism working as intended. Depends on whose intentions you mean. People who believe in free markets? Then not as intended. People who stand to benefit from rent seeking? Then as intended. I would argue the second group are far more politically influential.
- jmyeet 1y ago
  I suggest you read up on the history of capitalism, specifically the Inclosure Act [1]. The only difference between feudalism and capitalism is who is doing the rent-seeking. We extend all of this to intellectual property too. It's rent-seeking all the way down [2]. Have you seen any of the documentaries (or the movie) about how Tetris came to be? Some enthusiasts in the USSR made it. The contribution of capitalism was just whole levels of sublicensing and distribution agreements. Or maybe you think capitalism is responsible for innovation? Take drug research. Almost all novel compounds come of the education sector using government funding. The "innovation" here is for-profit companies marking that up 8000% and then lobbying for laws that forbid the government from negotiating prices or anyone from importing the same thing from overseas for 1% of the price. That's c apitalism. Maybe you believe capitalism is about "free markets". First off, there's no such thing. Second, markets exist in every economic system and existed thousands of years before capitalism did. [1]: https://en.wikipedia.org/wiki/Inclosure_act https://en.wikipedia.org/wiki/Inclosure_act [2]: https://en.wikipedia.org/wiki/Turtles_all_the_way_down https://en.wikipedia.org/wiki/Turtles_all_the_way_down
  - deleted 1y ago
    [deleted]
  - dh2022 1y ago
    I agree with 95% of what you said. The distinction between capitalism and free markets is very important - and most people conflate these two concepts which leads them to be manipulated. The only thing I do not agree with you is a minor quibble - most of the communist economic systems actively destroyed free markets. The only exception may be Communist China.

by jmyeet 1y ago

reactordev 1y ago

So what you’re really saying is NZ is for sale…

alephnerd 1y ago
All countries are if you're VHNWI ($5-7M minimum) or on a skilled visa. Plenty of options open up for skilled visas with somewhat expedited naturalization.
- wordofx 1y ago
  No. Most of Asia can’t be bought. Foreigners cannot own property in lots of Asian countries.
hcfman 1y ago
Yeah sure, didn't Peter Thiel buy a chunk of it ?

lotsofpulp 1y ago

> Every part of this is a series of intentional policy changes designed to transfer wealth from the poor to the ultra-wealthy. No, it is a transfer from those who don’t own land to those who already own land. Roughly correlates to young/poor/immigrant classes transferring wealth (or maintaining wealth disparity) to older/richer/beneficiary classes. That is why it is politically popular. Low and flat land value tax rates have always enabled this, but their effects were temporarily masked by the population boom allowing a lot of upward movement in the lower (non land owning) classes due to broad economic growth.

energy123 1y ago

It's got little to do with the ultra-wealthy, who have their wealth in equity. The problem is the upper middle class who have their wealth in land. They are 30% of the population and command election outcomes against anyone who tries to change the status quo. To them, the housing crisis is a housing bonanza and they plan on keeping it that way. I also take issue with buzzword "neoliberal", as if leftists would be any better with their rent control, NIMBY tendencies, and ideological hostility to supply-side policy (see Dean Preston in US, Zohran Mamdani in US, Adrian Ramsay in UK, Chandler-Mather in AU). In my estimation, they would be worse than any "abundance neoliberal", who at least have Austin, Texas as a successful case study they can point to, and who have ideas that make logical sense. The problem is not their policy ideas but the political reality they exist in where they're constrained in what they can do by a politically active plurality (landowners) that wish to persist the status quo.

bjornsing 1y ago
There’s some truth to that, but I think it’s even broader. Here in Sweden there’s a widely understood term (”bostadskarriär”) that roughly translates to ”housing career” and refers to building wealth through home ownership. It’s often more important to your financial success than your actual career, even for the working class. All this is due to regulations of course. In Sweden its a combination of tax rules, laws around borrowing, zoning regulations and construction standards that has kept the gravy train rolling. It’s a bit hard to see how it could continue though. Feels like it could come crashing down at any point. On the other hand: I’ve had that feeling for 15 years. EDIT: Monetary policy is the big one actually.
xkcd1963 1y ago
I'm sorry but rent control is what we need lest you want more occupied housing.
Workaccount2 1y ago
Thank you So tired of people talking about the housing crisis as if megacorp is the one buying all the houses to drive up prices. Yes, commenter, they do buy homes, but by far the single biggest player is regular people. They both are getting rich of the system and voting to keep it in place. Even worse though...houses are still being sold at these insane prices. There are still fresh dual income high earning non immigrant non billionairs childs non megacorp investor regular people still coming up with the money. I don't know whats worse, never being able to afford a house or seeing people you know (or thought you knew) somehow getting into one. And then voting down any build out initiative that would weaken their investment.

beachy 1y ago

Good rant but a bit of a simplification. NZers love to go off and do their OE (overseas experience) typically in their early-mid twenties often in hubs like London. A kiwi in their 30s who hasn't lived and worked overseas is the odd one out at parties. Many of those people do extremely well. I know several who made millions in banking and IT. Then they come back to NZ when they have kids and put that money into housing. These are some of the people paying $3M for a house. Others are people who have inherited wealth from their parents who invested big in NZ property last century (e.g. boomers). Others are wealthy immigrants from UK, SA, US even. Yes that sucks for the local who has only been earning $61K but it's reality. Add to that a weird situation where there is no capital gains tax on housing, with all political parties too scared to address that giant elephant in the room, and NZ offering an awesome lifestyle in many ways except for salaries, and and you have a perfect recipe for high house prices. Is it sustainable? My view is that it is (not in the sense sustainable == good, but in the sense sustainable == can keep going for a long time). There's no god given right to affordable housing. There was a period in the 1950s where there was prosperity for all, but looking back, that was the anomaly, not the current state of affairs.

jamesblonde 1y ago
Sounds exactly like Ireland of like 25 years ago.
niemandhier 1y ago
Currently in many countries the social contract stipulates that the majority of the population refrains from voting for a system that confiscates the wealth of the top 5% and in exchange their lives are bearable. Trump promised to address the problems of low wage workers, and in many places jihadists style themselves as social reformers. Since NZ does not have the luxury to blame it on refugees or neighbours, I don’t think it is sustainable.
markdown 1y ago
> There's no god given right to affordable housing. Sure, but if you take everything and leave nothing for the masses, sooner or later they'll make your life miserable too. Whether that happens with regular ole crime, or revolution, one way or another the scales will be balanced. If you want a comfortable life in your mansion, you'd better make sure that your butler and doorman can afford comfortable homes of their own and a decent standard of living.

deleted 1y ago

[deleted]

petesergeant 1y ago

> This is all capitalism working as intended Supply constraint of housing by rent-seekers who have managed regulatory capture is absolutely not capitalism working as intended.

graemep 1y ago
> Supply constraint of housing by rent-seekers who have managed regulatory capture is absolutely not capitalism working as intended. Depends on whose intentions you mean. People who believe in free markets? Then not as intended. People who stand to benefit from rent seeking? Then as intended. I would argue the second group are far more politically influential.
jmyeet 1y ago
I suggest you read up on the history of capitalism, specifically the Inclosure Act [1]. The only difference between feudalism and capitalism is who is doing the rent-seeking. We extend all of this to intellectual property too. It's rent-seeking all the way down [2]. Have you seen any of the documentaries (or the movie) about how Tetris came to be? Some enthusiasts in the USSR made it. The contribution of capitalism was just whole levels of sublicensing and distribution agreements. Or maybe you think capitalism is responsible for innovation? Take drug research. Almost all novel compounds come of the education sector using government funding. The "innovation" here is for-profit companies marking that up 8000% and then lobbying for laws that forbid the government from negotiating prices or anyone from importing the same thing from overseas for 1% of the price. That's c apitalism. Maybe you believe capitalism is about "free markets". First off, there's no such thing. Second, markets exist in every economic system and existed thousands of years before capitalism did. [1]: https://en.wikipedia.org/wiki/Inclosure_act https://en.wikipedia.org/wiki/Inclosure_act [2]: https://en.wikipedia.org/wiki/Turtles_all_the_way_down https://en.wikipedia.org/wiki/Turtles_all_the_way_down
- deleted 1y ago
  [deleted]
- dh2022 1y ago
  I agree with 95% of what you said. The distinction between capitalism and free markets is very important - and most people conflate these two concepts which leads them to be manipulated. The only thing I do not agree with you is a minor quibble - most of the communist economic systems actively destroyed free markets. The only exception may be Communist China.