Member log in

Pellett blaming the Chinese

 tweeted yesterday:

Pellett is a donation to both Labour and David Cunliffe and meant to be involved in their economic policy development. As you can see he has concluded the problem is Chinese expat house owners.

Note his robust source of data – a mate who texted him. And somehow this mate not only went around 25 houses, but went out of his way at every house to ask about the ethnicity of the owner, and whether or not they are expat. His data sounds about as reliable as a typical caller into talkback radio.

@SelwynPellett You push that racist button Selwyn. Winston will be delighted.

— Bill Ralston (@BillyRalston) March 19, 2014

 

Bill Ralston congratulates him on behalf of Winston. Ralston also supplies a fact, as opposed to a text from a mate:

.@SelwynPellett Fact: 6% of sales to “foreigners”. Fact: Only 1.5% of sales to Chinese. Racist scaremongering and political spin from you.

— Bill Ralston (@BillyRalston) March 19, 2014

 

So Pellett asked for some facts, and got them.

@BillyRalston @nzherald and their source? How do we check raw data?

— Selwyn Pellett (@SelwynPellett) March 19, 2014

 

But amazingly even after Ralston supplies the source, Pellett seems to suggest that the data may be made up or manufactured. This from the economic genius who cited a text from a mate as his source.

@SelwynPellett @BillyRalston The data is here http://t.co/StCcFQpJH8 – just 1.2% of sales to Chinese buyers not living here.

— David Farrar (@dpfdpf) March 19, 2014

 

I then helpfully stepped in and provided a media report citing the BNZ data. So we have Pellett arguing 92% of homes sought by his buyer mate were owned by Chinese expats vs the BNZ data from real estate agent sales that found it was 1.2%. You’d think he’s give up, but no.

@dpfdpf @nzherald I spend my life crunching data for living but shit in shit out. So where is robust audit worthy data source. Its

— Selwyn Pellett (@SelwynPellett) March 19, 2014

 

Now he is claiming that the Auditor-General or someone has to audit the BNZ data before he will accept it. This would be more hilarious than tragic if it were not for the fact he started the discussion by citing a tweet from a mate claiming that 92% of homes he had looked at were owned by Chinese. He certainly does know shit data when he sees it, but because it allowed him to bash the Chinese, he used it.

@DeepRed6502 @dpfdpf @nzherald yeap exactly. Change Chinese to English foreign owners makes no difference to -ve impact on economy.

— Selwyn Pellett (@SelwynPellett) March 19, 2014

 

Then finally he claims it is not about race, but foreign ownership. However he is the one who tweeted explicitly citing Chinese expat owners. Bit too late at the end to try and say it isn’t about race. The reality is he tried to scaremonger over Chinese buyers based on an anecdotal text from a mate. And then when called out on it, he rubbished any data that contradicted his mate’s text.

And this is who is helping Labour write their economic policy. That’s the really scary thing.

UPDATE: A reader has pointed out to me that Pellett wasn’t so opposed to foreign investment when he got hundreds of thousands of dollars from Jim Anderton in grants for his company, and then sold it off to a foreign buyer. Also it has been suggested that he ask family members how they would feel about his mate racially profiling them on the basis of assumed ethnicity if they were home owners.

Political commentator David Farrar posts at Kiwiblog.

Comments and questions
17

Plenty of other sources available.

Auckland City Council

Real Estate Agents

Property Guru

Have a look for yourself. By facts never get in the way of a story. Do they?

"I spend my life crunching data for living"
I am a bit worried a text message of 23/25 was used as evidence for someone crunching data for a living.
Even more worrying is that some people actually believe that.
I also crunch data for a living, maybe I should txt more often.

What a prize buffoon this Pellett guy is!

Sounding like Labour is intent on using the race card this election year and digging itself deeper into enemy territory!

Sorry, Pellett but that race card territory is already occupied by the Greens and Winston.

Maybe you want to try sound economic policies instead?

Sound economic policies?

Unfortunately National has those all locked up for now, which is why this idiot sounds as credible as Cunliffe.

Mind you, last thing we need is Labour to leak another 3% to NZF!!!

Pellet may well be right. He is talking about homes in the Grammar zone, not Auckland wide, not country wide, but grammar zone. And five bedroom homes to boot.

Properties with these characteristics are not representative of New Zealand's housing stock at large, but are unique to that small geographical area in Auckland. Ralston is mistaken when he tries to use national averages that represent all of New Zealand's housing stock as evidence to refute Pellet's specific claims about a very small subset of that stock. Such a tiny fraction, selected from anywhere in the country, would stand a high chance of diverging substantially from the average.

In the case of Auckland's grammar zone, it is well known that houses there are particularly sought after by the Chinese due to the strong priority they place on the education of their children, particularly at top schools. Those characteristics also make the houses there a very attractive investment proposition to overseas Chinese.

Of course nearly everyone who already owns property from the baby boomer generation is going to defend the status quo. Foreigners are predominantly the ones who can afford the ludicrous house prices that cash the boomers retirement cheques.

Try put yourself in the shoes of someone in thier late 20s or 30s, trying to buy a first home in Auckland. I can speak from personal experience that even earning good money (much higher than average) isnt currently enough to keep pace with your savings compared to the house price inflation. Its like trying to shoot a target strapped to the back of Ferrari. And the target just halved in size with LVRs.

I will get there eventually, but I shudder to think how hard it is for those on low incomes. Probably near impossible for some I would think.

The Foreign ownership debate needs some perspective. I am free market advocate as much as the next guy on here. But NZ has a history of economic liberalisation to the extent that we put ourselves at an undue disadvantage. Whats wrong with tilting the odds into our a favour a little? Everyone else does it. I cant buy an apartment in Beijing. NZ's total economic liberalisation will only ever reach its true potential if everyone else follows suit. But until they do, why make it harder for ourselves?

And before the boomers jump all over this saying it was just as hard 'back in the day' - how many needed the equivalent of a $100k CASH deposit just to buy an apartment? Not many I would imagine.

No wonder my peers are leaving in droves.

Stop whinning.

Try this for size. In 1987 returning from the UK I purchased my first house and was paying 22% interest. Every generation has a hurdle they have to get over, the current generation is not special.

You don't need $100K deposit to buy an apartment, but you do to buy a $500K apartment. Start small like we did back in the day, then move up

Back in '87 when the average house price was 2.5 times the average income? Which was 6.5 times average income by 2007. And who knows what now.. The Herald recently claimed the average Auckland house price was 19 times the average income. Seemed a tad unbelievable to be honest - but still, you get the point.

Where are you going apartment shopping, Dermott? Taumarunui? The average Auckland house is $650k. Spending $500k is starting small.

Leaving to London & New York, to buy the cheap houses over there, no doubt?

No, leaving to London and New York to give themselves a better chance at getting a deposit together so they can come back and start a family.

Thanks for a positive contribution to the debate though.

If you are competing against money that has been earned/generated offshore then the only way you can also compete in the Auckland market is to head offshore to also chase/earn that same money.

Perhaps a thought experiment may help enlighten you - the best houses in Phenom Penh cost 20k and the average earner there earns 4k a year. I earn $100k a year in NZ and I decide to buy a property there. The locals can afford 20k but as they are short-sighted they allow me to buy it for 25k benefiting the existing property owner but almost no-one else. Down the street the same thing happens except the purchase price is 30k and so on and on...

These houses are all dirt cheap to those of us earning money offshore but for the locals who can't move as freely as the capital being used to purchase their housing in the hope of also earning $100k a year the story isn't quite the same...

Still they chase the Cambodian quarter-acre pavlova paradise dream and load up on ever more debt to try and compete with the offshore buyers. All the while the profits on the debt is heading back across the border to the Thai owned banks.

All in all a true recipe for prosperity for a lucky few with vested interests and pretty rubbish for everyone else given the demand for shelter is pretty damn inelastic.

Also I love the baby-boomer wizards that harp on about high interest rates and that barrier they had to overcome are particularly tiresome as I'm sure their wages were only going up by about 1 or 2% at the same time of such high inflation... cue Tui Billboard...

FHB, I sympathise, even if commenters like Dermott spout pathetic factoids to try to put you in your place. Within a few years Dermott was back to far more sensible interest rates and could rapidly pay down his fairly low principal (it must have been low otherwise he couldn't have afforded the 22% interest on it).

First home buyers now won't escape the noose for decades, if they dare put their necks into it.

My mind is made up - don't confuse me with facts

This is feeble stuff, Farrar and Ralston. Invoking a Winston bogeyman is adolescent. Winston is about the only MP exressing public concern at the moment. You guys need to stop talking to one another and start listening.

Much better comments are coming from the feedback you are getting. First home buyer is right. So is David B. But you just aren't listening, are you?

This present young generation trying to start a family has all the dice loaded against it by your well-heeled generation

And the one thing the rest of us are tired of hearing is the racism accusation used as a bullying truncheon.

Those of you wedded to the freemarket ideology need to realise it would be nice if we had it - but we don't. We were conned. Money talks.
This country has been incredibly naive in being far too open and expecting far more tough-minded governments, with their own backs to protect, to follow suit.

The public has perceived quite rightly that too much of this money coming into the country can well and truly outbid not only New Zealanders trying to buy houses, but also trying to buy land and our commercial assets.

Do you feel-good theorists actually dispute this?

Hope the foreigners buy up most of NZ.

Then xenophobic racist individuals like you can bugger off to Australia.

Pretty desperate stuff from Selwyn, who is only trying to help his beloved labour party after the caning in the polls. Maybe he should have spoken to Matt McCarten before starting this line of attack.