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Size of Chinese housing ‘problem,’ MBIE’s corporate welfare, secret recording ‘entraps’ accountant and milk safety-net gap

The New Zealand Initiative’s Bryce Wilkinson has distilled the size of the "problem" of foreigners buying New Zealand houses.

If estimates are correct, 117 New Zealand homes were bought by Chinese last month – out of 7315 houses and apartments sold.

In today’s National Business Review print edition, Dr Wilkinson says a small expansion in home construction could account for all overseas buyers and for New Zealand to be prosperous it should align itself more closely with Asia, and resist the proposition of becoming an Australian backwater.

Grant Thornton partner Matt Parkinson picks up on the same theme, saying any political response to housing issues should acknowledge it’s a case of supply and demand and resist the temptation to complicate things.

Meanwhile, NBR begins an investigation into what is going on within the Ministry of Business Innovation and Employment – and columnist Matthew Hooton starts with the ministry’s hundreds of millions of dollars of corporate welfare and minister Steven Joyce’s micro-management.

Political editor Rob Hosking covers the curious case of Property Ventures liquidator Robert Walker, his Institute of Chartered Accountants' professional conduct body hearing and a “disgraceful” secret recording used as evidence against him.

Shoeshine tackles the recent tech correction and what it means for New Zealand technology company founders preparing to go public.

Columnist Neville Bennett picks through the history of bear markets and predicts those who ignore the present warnings will pay a high cost.

In other news, Chief Ombudsman Dame Beverley Wakem is backing NBR’s complaint over the Northland Regional Council’s refusal to release the cost of an investment report.

In Heartland, Professor Jacqueline Rowarth traverses recent food safety scares hitting the headlines in recent months and why New Zealand’s problems reflect people avoiding milk processing in the misapprehension it is somehow bad.

Primary industries reporter Jamie Ball reveals a $4.28 million partnership between the Ministry of Primary Industries and the Avocado Industry Council was struck without a contract being signed and without ministerial input into its objectives.

Media reporter Victoria Young picks up on Colenso BBDO’s cost-cutting as it looks for a way out of the traditional, TV-led ad agency model.

Briefly:

  • Columnist Michael Coote outlines the best way for the West to halt Russia’s Ukraine grab.
  • In Media Watch, David Cohen exposes the mainstream media’s two-way bet on the royals.
  • In Initiative Matters, Professor James Allan ruminates about whether sky-high popularity should be the goal of a good prime minister.

All this and more in today’s National Business Review. Out now.

Comments and questions
13

The Chinese problem is focussed on central Auckland-for now. So it is quite sneaky for commentators trying to prove otherwise to quote 'NZ-wide' sales numbers. Try presenting the % figures for central Auckland and you will see there is a very obvious problem.

Ok then, on the above stats 1.6% of total NZ sales were bought by foreigners (117 out 7315). Auckland is roughly 1/4 of NZs population, so even if we assume all 117 foreign purchases were in Auckland, the max we are talking about is 6.5% - hardly a cover up. As noted below, 23.1% of Aucklanders identify themselves with an Asian ethnicity. Ricardo et al seem to make the assumption that if someone looks Asian they aren't NZ citizens. Of course, I could make the same assumption about the heritage of someone named Ricardo, but I won't.

Ricardo, there is no "Chinese problem". The problem is people with incomes that are not big enough to buy first houses in suburbs close-ish to the City expect to be able to and are whining that they can't. There is plenty of reasonable real estate in Papakura.

Absolutely
There is a cover up here
It is specifically related to the Auckland market where the concern should be
Well said Ricardo

I've been to several open homes for Auckland apartments recently and I have been the only European, with 10+ Asian buyers at each open home.

Perhaps some of these buyers have residency or even citizenship, so the total number of Asian buyers in the Auckland market, including residents and foreign ownership, could be much higher than is reported in the media.

It shouldn't be a surprise to see Asian buyers at auctions or open homes. As NBR ONLINE told us last week (http://bit.ly/1l42cl1), 23.1% of Aucklanders identify themselves with an Asian ethnicity. When real estate firms talk of overseas buyers they are referring specifically to those people living overseas, including expatriate Kiwis.

So if an 'Asian' buyer is a resident or indeed a citizen how long do they have to been here not to be an undesirable 'Johnny Foreigner' - how many of the 10+ Asian families were families who have been here for generations whose parents were willing to provide advice or provide a financial leg up with a deposit to give their kids a chance at their first home?

So are the Asians to blame for no other Europeans turning up to those auctions? Presumably the vendor was quite relieved more than one bidder turned up.

Bryce Wilkinson's economics have long been from the far Right _ wasn't he the former NZ Business Rountable Roger Kerr's first port of call for advice, based in their offices?

But the heady ideology of laissez-faire has long burst its big-business- rules bubble, as NZers have recognised that unfair competition can (and certainly has) damage our own people, and our own businesses. Moreover, shoddy products can drive our better ones when underpinned by an underpaid workforce and greater capital backing.

.This country has been damaged by excessive reliance on theory, and blinkered vision, with far too little concern for small business, for protecting the ownership of land and our strategic assets for NZers - from those who can pay far more and cream us up.

We a now a much less cohesive, stable society as a result, of what is, and has been, happening.

A far better knowledge of history and the perennial threats to democracy should be part of every economist's so often narrow, ideologically-driven degrees in economics.

The price of everything...but the value of nothing...?

I wish people would stop using the term "Asian" when they really mean "Chinese"

Why? Does it matter?
British Asians are British citizens of South Asian descent, ... http://en.wikipedia.org/wiki/British_Asian

There was a Chinese influx from the 80s. The influx from the Indian Subcontinent is more recent. So the term Asians came to stand, colloquially, for the Chinese ... it will take time to change, if it ever does IMO.

Australia's policy of only new homes or land for outsiders is the key. New Zealand will also need to consider a Canadian Vancouver style move to ensure population is spread throughout the country or risk Auckland becoming much much larger.

Nothing so reliable as research that doesn't use relevant data to arrive at a conclusion.

And New Zealand isn't an "Australian backwater", it's a Chinese backwater. AntiAustralian racism is unhelpful at the best of times but particularly during Anzac weekend.