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1128 posts

Uber Geek

  #1572232 15-Jun-2016 11:08
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gzt: Government makes the next move:

NZHerald: Temporary, pre-built houses could be placed on empty lots in Auckland to help ease the housing shortage, Prime Minister John Key says. Mr Key confirmed today that "pop-up" homes were one of a range of housing options being considered by Social Housing Minister Paula Bennett.

If it was not for community organisations like Te Puea the government would have ignored these issues for a long long time if not forever.

The problem with temporary buildings is they tend to become permanent. Look at state housing, you have people live in them for 40+ years.

You will end up with a bunch of inadequate structures (that still cost a lot) that stay for years.

11134 posts

Uber Geek

  #1572261 15-Jun-2016 11:43
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Pays to note that the RBNZ actions (LVRs and proposed income: loan ratios) are not there to "cool the housing market" though that may have been considered as a secondary benefit to the primary reason - ensuring stability of the banking system.  When politicians claim that this is "doing something" (about housing affordability) - it's almost pure spin - they don't want to do anything.


IMO the banks restrictions on loans against foreign income are probably implemented by them to divert RBNZ interference - if the banks didn't act, they'd possibly be forced to act - and if those were RBNZ restrictions they'd probably have a permanency to them that the banks wouldn't like - they wouldn't be able to make policy changes to suit future changes in markets.  I don't think it's cynical to suggest that it's a message from the banks to RBNZ to "back-off - we're capable of self-regulation".


Neither the banks nor RBNZ give a hoot about property price inflation, the trading banks make vast profits from the mortgage market, the RBNZ only gets concerned if house price inflation spills over into general inflation - and despite the "wealth effect" of increased house prices, there's been little sign of that - deflation remains the biggest risk at the moment. If you want to see catastrophic deflation - it's hard to imagine anything more certain to cause it with the way things are right now - than a property market crash. That would really close people's wallets and kill demand.  Despite lousy interest rates for bank deposits, it pays to note that as mortgage debt has ballooned, term deposits held in NZ accounts have also ballooned.  That's interesting IMO - not everybody with surplus cash is taking the risk to invest in property, nor do they seem inclined to want to invest in other markets. 







Anyone who believes that banks act in anyone's interest other than their own is delusional!





Of course not - but by Adam Smith's "invisible hand", those actions of self interest are supposed to benefit all.


6058 posts

Uber Geek

  #1572388 15-Jun-2016 13:48
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Anyone who believes that banks act in anyone's interest other than their own is delusional!



 Of course not - but by Adam Smith's "invisible hand", those actions of self interest are supposed to benefit all.



Adam Smith's "invisible hand" relies upon genuine competition ... I'm not sure we really have that in main stream banking.


2695 posts

Uber Geek

  #1574718 15-Jun-2016 21:24
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The New Zealand lending market seems pretty competitive to me. There are something like 25 registered banks in here. Plus a bunch of other other non-bank lenders. Which is more than enough competitors for genuine competition to exist.


So I would be prepared to say that we do indeed appear to have true competition here.


It's certainly far more open and competitive than (say) telecoms, petrol or supermarkets, which have 2-4 players dominating the market.



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