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Newsroom Pro's 8 things at 8am
1. Trolling millennials is easy
There has been a rash of articles on Stuff and NZ Herald in the last fortnight trying to show young people that all they need to do to buy a house is to start saving and work hard.
They sparked the predictable response (and plenty of page impressions) from outraged millennials pointing out the obvious: house prices have risen vastly faster than incomes for the last two decades and they are having to save for much longer for a deposit because rents are also now rising faster than incomes and they have to make student loan repayments that their parents didn't.
So the release of an analysis yesterday by the Property Investors' Federation that it said showed it was easier to buy a house now than in 1985 will no doubt rark up Generation Rent even more.
Federation chief executive Andrew King wrote that first home buyers buyers in 2015 were paying 45 percent of their income in mortgage payments, which was less than the 52 percent being paid in 1985 when interest rates were 18.9 percent.
"Commentators who state that it has never been less affordable to get into your first home are wrong and may inadvertently be doing a great disservice to first home buyers" said King.
His comments followed NZ Herald business editor at large Liam Dann saying in a opinion piece that young house hunters should just give up.
The problem with the analysis is that it did not include the effects of student loans on the incomes of first home buyers now, and used national rather than Auckland figures for house prices and rents. It also didn't take into account what might happen when interest rates normalise higher and used average wage figures.
Even with that, King acknowledged it would take almost twice as long (seven years) to save a deposit now than it did 30 years ago.
2. Generation Rent can be ignored
The dirty little secret of the online debate between millennials and baby-boomers is the baby-boomers know the young ones can be safely ignored because they don't vote much.
In theory, millennials and Generations X and Y will eventually overwhelm the baby-boomers in numerical terms some time in the 2020s, as this chart on the US population courtesy of AMP Capital shows.
In theory, if they voted in a bloc they could exact revenge or try to change the equation by introducing land or capital gains taxes, or voting for a Government that launched a massive house building programme. They could also vote for means testing of NZ Super and healthcare for the generation that owns more than $1 trillion in assets.
But that would require Generation Rent to actually become engaged in politics and vote. There are few signs of that.
Andrew Little abandoned Labour's capital gains tax policy because the 'missing million' voters failed to turn up in the 2014 election. Parties with the opinion poll support of more than 80 percent of voters are opposed to a capital gains tax or any changes to the age of eligibility for New Zealand Superannuation for at least 20 years.
An older generation of politicians and voters support resource management rules and infrastructure funding arrangements that are strangling house building rates at levels much lower than during the 50s, 60s and 70s when they were growing up. They refuse to prioritise house building or pay the extra rates or taxes needed to fund the infrastructure to ramp up house building.
But that generation who bought houses in the 80s, 90s and early 2000s can rest easy. There will be no revolt. Just 49 percent of 18-28 year olds actually voted in the 2014 election and young renters voted at even lower rates in council elections.
The millennials may be sharing and disliking the trolling articles, but they are yet to get into the ballot booth, or show any real signs of engagement in the political process.
3. Speaking of trolls...
This is an excellent examination on Newsroom of the practice of trolling online from Luke Goode, Associate Professor of Media and Communications in the Faculty of Arts at the University of Auckland.
He finds both negatives and positives.
"In principle, trolls can challenge our cognitive complacency," he writes.
It's a useful look at the practice, which has had plenty of practice recently.
4. Housing benefits
Further to the housing debate, the Housing Foundation released research yesterday on how moving families out of rental property and into their own affordable homes improves social and economic welfare.
The Foundation was essentially making the 'social investment' case for investing in affordable housing.
"The housing market is not working, particularly for low income families who are being left behind. They are paying very high rents, have little security of tenure and are unable to buy their own homes," said Foundation Chair Tony Lanigan.
"We hope this research informs the Government, and other stakeholders, to become active investors or co-investors in affordable housing solutions because it directly contributes to positive health, crime, employment, educational and wealth outcomes that benefit all New Zealanders, including taxpayers," Lanigan wrote.
The research included a 26 page literature review on the social and economic impacts of housing tenture by Charles Waldegrave and Michaela Urbanova at the Family Centre Social Policy Research Unit (FCSPRU).
Meanwhile, Labour announced yesterday it would build a mix of 400 state houses and Kiwibuild houses in the Hutt Valley. Expect many more of these regional announcements in the months before the election.
5. A social investment case
There was also a 63 page report by BERL on the Fiscal costs of different housing tenure groups in Auckland.
BERL found the per capita costs for Government were higher for renters and PAYE earnings were lower.
"We applied our per capita costs to conclude that there are potential net savings to the government, in transitioning people from a (any) renting situation, to an owner-occupier situation," BERL's Ganesh Nana, Natalia Fareti, Konrad Hurren & Hugh Dixon found.
It's a useful analysis that makes the case for social investment in housing that benefits taxpayers at large in the long run.
6. More defamation cases
It appears the Little vs Hagaman and Williams vs Craig defamation cases will have second lives, and generate plenty more income for lawyers.
Lani Hagaman said yesterday she would pursue a retrial, and Justice Katz ruled a miscarriage of justice in the Craig case, where a jury awarded over $1.2 million in damages to Williams. The 39 page ruling by Katz is well worth a read.
The old adage about no one really winning defamation cases except the lawyers appears to apply here.
7. Just in case you missed it...
One curious coda to the RMA debate that concluded last week was that the Opposition parties plus ACT and United Future all voted again during the third reading debate for amendments that would have abolished Rural Urban Growth Boundaries and allowed the financing of infrastructure bonds paid for with targeted rates.
The amendments were defeated by National and the Maori Party.
The irony of a Government that has railed against restrictions on land development by councils voting against removing those restrictions should be noted. And also that the proposal for infrastructure bonds was backed by the right-leaning New Zealand Initiative and voted for by the Greens and Labour. Strange times indeed.
8. Food for thought
I'd recommend this New York Times Magazine piece on the relationship between CNN boss Jeff Zucker and Donald Trump as a worthy long weekend read.
It explains a lot about the state of the media today and gives some insight into how Trump operates. It's not a pretty picture, but fascinating nevertheless.
Have a great long weekend.
cheers
Bernard |
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