I am paying a mortgage for a house which I won’t be able to pay off in my lifetime. I live out in the country side. Around me are farmers who are struggling to pay off their mortgages and won’t be able to pay them off in their lifetime. I am aware that we are living in what could easily be the biggest housing bubble in history but most of my neighbors are not. We have been sold a bundle of goods when they told us that houses would always go up in value but for most it’s all we have got.
Lately people who are selling their property, especially in Auckland have found that they where selling to foreigners who wanted to invest in rental properties. Most notably Chinese people it seems.
In the 70s and 80s Amsterdam, Holland was very attractive to foreigners and Amsterdam sustained a boom because of this but thousands of Amsterdammers could not afford to buy or rent because of these foreign investments. The city council at some stage condemned most of the houses these investors bought after years of neglect and I mean we are talking whole city neighborhoods because to these investors it was the ground under those houses which was worth the most in the long run leaving thousands of people without homes having to stay with their parents until their mid thirties or paying unaffordable rents.
I was one of those who said; “screw this”, and with hundreds of other young people (including the daughter of the prime minister) began to squat those condemned buildings. It meant having to put in new floors, toilets and electricity as these houses were partly demolished inside to make sure they could not be rented out anymore. The houses where multi-floored and part of bigger equally demolished complexes and dangerous to rebuilt but we where at our wits end and I lived in a squat for may years before the council was able to buy all these houses back for pennies on the dollar and rebuilt descent social housing projects for the likes of me and it wasn’t until many years later I found out that the council was secretly very pleased that this happened because it gave them leverage against the invasion of foreign money.
But that was then and this is now and we’re not in Holland but here in New Zealand where private property is sacrosanct and socialism a word of the devil. So why is David Shearer promising that he will make it impossible for us to sell our houses to the highest bidder, even if that is a foreigner. We are after all part of a global economy and there is, so we are told, free global trade!
Is he appealing to a patriotic, nationalistic streak here in New Zealand which, if it were strong enough would prevent New Zealanders from selling their property to the Chinese as they would be compelled to protect this country against the invasion of the “yellow danger” and they would only sell to another New Zealander anyway, or is there something else at play here?
First let me show you a graph:
According to the article I found this in, New Zealand which according to this graph is the fourth most overvalued market from this list of countries but not only that it is a country that hasn’t realized the bubble it is in and while wise people would hesitate to buy a house in such a country, the prices are still RISING!
According to this article:
Where houses appear overvalued but prices are still rising. This is the case in Canada, Norway, New Zealand and, to a lesser extent, Sweden. Economies in this category are most vulnerable to the risk of a price correction – especially if borrowing costs were to rise or income growth were to slow.