The Reserve Bank of New Zealand (RBNZ) got it wrong when it cited immigration as the main reason for inflation in house prices.
The Bank’s statement appears to lack an understanding that this is the only factor when looking at the total situation.
The Auckland Council has restricted housing developments for a number of years and it is only because the Government has drawn serious attention to this, that things are starting to change.
The number of building consents is still far too short of what is required.
There has not been an increase in migrants, although there has been a net migration gain and this is in relation to a cycle aspect rather than a continued issue.
New Zealanders are a transient migrant population with approximately 20% of them living offshore. The issue that is different now is that New Zealanders are not leaving.
New Zealand First Leader Winston Peters has failed to understand the makeup of the migrants coming into this country.
Editor’s Note: RBNZ Governor Graeme Wheeler told a Parliamentary Subcommittee on November 12, 2014 that statistic over many years had showed that there was a strong correlation between house prices and migration.
He said that he would relax the current restrictions on mortgage loans.
New Zealand First Leader Winston Peters, a frequent critic of the government’s immigration policy, said in a statement issued the following day that RBNZ had confirmed that house prices in Auckland would continue to soar while ‘wholesale immigration’ is allowed to continue.
“A simpleton could recognise that immigrants need somewhere to live and will add to the demand for house. Mr Wheeler has warned of a resurgence in house market prices, pointing to migration figures and New Zealanders can rightly blame the government when this occurs,” he said.
Education institutions are actively seeking international students; also being sought are skilled migrants along with entrepreneurs and investors.
The government has a Resident Programme, which is capped at between 45,000 – 50,000 per annum. We have not reached this figure.
This programme is split between 30,000 skilled/business migrants that we need, 11,000 partners of New Zealanders, 5000 family reunification migrants and 4000 humanitarian migrants, which includes refugees.
Therefore, it is difficult to see where Mr Peters would like to make cuts when the combined numbers of skilled migrants and partners of New Zealanders total some 41,000 there is not a lot left. Are we to stop family reunification and refugees?”
Apart from migrants, the other aspect to the housing market crisis in Auckland is speculative New Zealand buyers.
The government should encourage the Inland Revenue Department to ensure that any tax liability is being investigated. There are many people buying a house now for selling next year for the profit gain.
June Ranson is the Chairperson of the New Zealand Association for Migration & Investment, comprising lawyers and licensed immigration advisers who must uphold professional standards and comply with the Association’s strict Code of Ethics. Website: www.nzami.co.nz