The Property Institute, in a burst of savage irony, has been rattling its chains about the latest housing bubble threat to Auckland. If you are surprised that a lobby group for property owners and investors is bothered by rocketing house prices, then you might want to read the small print. As CEO Ashley Church points out:
Proposed measures to help more people into apartments as their first home or to introduce income limits on the amount people can borrow from banks could create an “apartment bubble”, the Property Institute warns.
In his apocalyptic vision, he outlines an eight stage process whereby the Reserve Bank’s perfectly sensible idea of limiting what people can borrow to tackle our mountain of private debt, along with Auckland Council’s equally rational plan for moderate densification of central suburbs, will force poor benighted souls into buying a glut of new apartments in central Auckland. This would result in the armageddon scenario of:
Within 7 to 10 years Auckland becomes a highly ‘intensified’ city with large numbers of low quality apartments dotting the landscape “alongside free-standing residential homes.
What an awful prospect! Indeed, if you replace the word ‘quality’ with ‘cost’, since I find his argument as to why they would all have to be shanty and tinpot pretty tenuous, then Auckland would look just like most other large cities around the world. Shocking!
The Minister for Lack of Housing, Nick Smith, has also waded into the debate in typically bullying fashion. He is childishly threatening to overrule Auckland Council and force through development in remote outer suburbs, despite the Council pleading that the extra infrastructure costs on building so far out will hammer ratepayers:
Ms Hulse said that until the Government “commits to funding the vital infrastructure required” on such greenfield sites, the council would “focus on brownfield sites which already have good levels of infrastructure service”.
“But we still need central government help to shore up the funding for roads and water and electricity supply,” she said. “Otherwise the cost of growth will be borne by Auckland ratepayers.
Anyone would think that the National government wanted to force higher rates on Auckland just to spite Len. Exacerbating all of this are the 22,000 unoccupied homes in Auckland – a staggering amount, if you consider that Greater London, which has eight times Auckland’s population, has roughly the same estimated number of unoccupied homes. The very definition of a bubble is when speculators purchase a commodity for no discernible use or return, but purely on the expectation its price will rise significantly (see tulip prices around 1637).
When commentators on all sides agree that the problem is a classic case of high demand and low supply, and since the government is ideologically incapable of legislating to stop overseas investors, the only solution is building affordable homes. Yet the glacial pace of building boutique homes on large sections in ever more remote suburbs suits just about everybody with a firm foot on the Auckland ladder. Sadly, political expediency, as well as point-scoring between a National government and a Labour mayor, is strangling any attempt to address the problem.
I think Australia might be experiencing Peak Abbott. I thought it might have been reached when he munched a raw onion in public, or when the King of Speedos nominated under-honoured Prince Philip for a knighthood, or when Tiger Tony patronised the Irish on St. Patrick’s Day, or responded to the death of an Aussie soldier in Afghanistan with “shit happens“, or described European settlement of Australia as “a wise investment of unoccupied, er, sparsely-occupied land” and indigenous Australians living in the outback as a “lifestyle choice“.
But no. The guy who promised the electorate, Canute-like, that he would ensure no more refugee boats ever reached Australia, has now been revealed to have found an ingenious, if reckless, way of turning them back: bribing the smugglers. Retorts that paying off smugglers was also carried out under Labor, even if true, are no comeback, given that Labor always had a more pragmatic yet humane approach to the asylum problem, recognising the basic fact that when a poor country with dubious human rights lies close to a richer, freer country, a steady tide of asylum-seeking is inevitable. And it is Abbott who is the hypocrite, given his previous remarks that:
“The only way you can stop the deaths is to stop the people smuggling trade. The only way you can stop the deaths is in fact to stop the boats,” he said.
Tony, if you pay off smugglers, you won’t stop the trade, you’ll encourage it. What a gig. Take thousands of dollars off desperate refugees and then take tens of thousands more off desperate governments – I’m clearly in the wrong job.
And finally, if we have reached Peak Abbott, please please please tell me that we haven’t yet reached Peak Trump. He’s no longer just thinkin’ of runnin’ for President, hell, he’s really runnin’ for President. And he’s gonna build a wall. A big one. To keep those pesky Mexican drug-dealing desperadoes outta the good ol’ USA. For a man so right-wing he was once derided by a Fox News commentator as being a “bloviating ignoramus”, Trump’s candidacy is a gift to all non-crazy, vaguely-liberal Americans who want to expose the frothing underbelly of Republican political beliefs to swing voters. And to those who think he is an unpalatable stooge purely to make the likes of Jeb Bush look more electable, it rarely works out that way once the campaign is in full swing. Trump’s colossal ego is matched only by his staggering lack of self-awareness, and he is likely to pull the other candidates further right with his bizarre pronouncements, not left. He might even run as an independent. Let’s face it: he’s got the money.