Cheap shots may be self-defeating
Everything about the outburst at the weekend about alleged distortions introduced into the Auckland property market by foreign ‘‘speculators’’ looked shabby. The numbers on which it was based – which were from a realestate source that was kept anonymous for some unknown reason – were stretched to make a conclusion they could not support. Emotive language (a ‘‘tsunami’’ of money is supposed to be dangerously looming) was used to mount a case against a single nationality, the Chinese. A hot-button issue (Auckland housing) was hooked to another (immigration) to be exploited for opinion-poll ratings. The odd thing was that this time the perpetrator of the whole muddled exercise was not one of the usual suspects but the Labour Party, which might have been expected to be a little more responsible.
The matter arose from some statistics compiled by an unnamed Auckland real-estate agency, which was said to account for 45 per cent of sales in city. According to the figures, it was concluded, based on the names of the buyers, that for one three-month period at the beginning of the year, 40 per cent of buyers for Auckland residential property were of Chinese ethnicity, far higher than the proportion of Chinese resident in the city. There was nothing in the numbers to show how long the buyers had been here, how many were resident here, what they were buying for and so on. Even with statistical adjustments to make them a sounder basis from which to draw conclusions, they were awfully thin stuff on which to base any kind of policy.
Nonetheless, Labour’s housing spokesman, Phil Twyford, cited them to suggest foreign speculators were pricing New Zealanders out of the Auckland housing market and to warn in an alarmist fashion of ‘‘a tsunami of Chinese investment’’ heading our way to make things worse in future.
It would be surprising if there were not some Chinese speculators in a housing market as hot as Auckland’s has been. But their effect on the market, according to most knowledgeable participants, is unlikely to have been great. Speculation, moreover, is not a one-way bet. The Government has recently introduced a capital gains tax to curb some of it. In addition, if the Reserve Bank gets its numbers right, any speculator here is facing a foreign exchange risk. At some point, also, it can be expected (although there is no guarantee in this) Auckland may get its housing supply problem worked out, bringing supply and demand back into kilter and taking some of the heat out of the market. Xenophobic attacks on one group, in other words, are uncalled for.
They are also self-defeating for if they do anything they may well deter Chinese investors in the productive parts of the economy from coming here. Throughout its history since 1840, New Zealand has relied on overseas investment to grow and prosper and the country continues to need it. Christchurch has courted such money, from China as well as other places, with mayoral tours and the like, to give the private rebuild of the city more impetus. Success, it has to be said, has been limited. Off-putting talk like that at the weekend will not improve it.