New Zealanders who want warm, dry, affordable and secure housing should move to Australia, columnist Bernard Hickey says.
He first made the comments in a column he wrote last week, which he says the was the ugliest and most despairing he has ever written.
“I now think it's unrealistic to say to those people, you can have affordable housing in your lifetime. And we're essentially now a country where you have to be born into wealth, to be able to expect to have your own home and be able to build a stable family life,” Hickey told Jesse Mulligan.
Photo: 123RF
Having covered the housing market for over 20 years he has now given up hope there will be affordable houses to buy or rent for a generation.
Up until a couple of years ago he still had some hope that the problem could be solved, he says.
“So that's why I've decided now, having seen the results of several attempts by politicians and the grown-ups, if you like, of New Zealand's political scene to solve this problem, and having seen all of them effectively give up - that's what the Prime Minister did when she said she would never in her lifetime try to tax capital gains or effectively, wealth.
“And that is the one of the core problems here along with of course, the fact that a lot of people who now own these homes are willing to do an awful lot to ensure the value is protected and keeps growing. And one way to do that is to stop new housing supply.”
The Public Finance Act starves councils of the funds they need to build infrastructure and therefore release more housing, he says.
“So, the Public Finance Act, which this Government has signed up to, essentially says you must run net debt at a very low level, and much lower than every other country and you must keep the size of government around 30 percent of GDP.
“And no one's challenged that - neither side of politics has challenged. But until you do that, it means that councils will be forever saying, oh, sorry we can't do that development because we don't have the money for the infrastructure.
“And the government will say, as it did two weeks ago, oh, we can't fund that new suburb because we want to keep a lid on debt, when clearly, there's no real market or economic reason to do that - it's simply written into the law.”
Bernard Hickey Photo: RNZ
There is nothing intrinsically wrong with people not owning homes he says, but our rental market is broken too.
“That would be fine if renting was affordable, and people could live happily and securely renting. But the one thing I included in the podcast and in the article was an interview with the head of the Growing up in New Zealand study, Susan Morton, who has followed babies as they were born 2009 to 2011 - 6000 of them in Auckland and Waikato and followed them through their lives so far.
“So, there are about 10 years old now. And it was very clear to her that 40 percent of those kids are growing up in insecure, unhealthy housing. And because of that, they are more stressed, they're sicker, their parents more stressed, they more financially stressed, they are growing up with an enormous handicap.”
Professor Morton said that when those children were born, the parents were optimistic.
“They were quite hopeful for their futures, hopeful that the kids would do better than them, that they'd be able to build a strong base for them and their kids would develop and have a better life than they did.
“But the hope has died for them. And this is why I think it's worth pointing out to people that yeah, it's okay, if renting is safe and affordable. But that's not the case.”
Private rentals are “incredibly expensive” and will remain so because politically there is no appetite to reduce prices, Hickey says.
“And that's the guts of it, the political economy, the fear of politicians about alienating middle New Zealand who still own homes, and reducing house prices which is the only way you get anywhere near affordability.
“I think for those people who do not have access to family wealth, or can't marry into it, then if you want to have that secure, warm, dry home, either to rent or to own, your best bet now is to go to Australia.”
Bernard Hickey is a columnist and host of the Spinoff podcast When the Facts Change
