COMMENT: One of the privileges of writing for OneRoof is that it provides me with a platform from which to express my views about property, both in my regular weekly column and, increasingly, in interviews with other media. Typically, these interviews introduce me as a property commentator or as a property expert.
I’m never comfortable with the latter description and have never referred to myself as an “expert”. Yes, I have extensive knowledge and experience of the New Zealand residential property market and am confident in my various views, but ultimately they’re just my opinions and I make a point of highlighting this whenever the opportunity presents itself.
That’s not to say that my articles aren’t well researched. Indeed, my various opinions are increasingly data-led, which means that they’re based on what the data tells us rather than the populist opinions of the day, but they’re also a summary of my assumptions about what the data means to the market going forward and they should always be assumed to be accompanied by a huge caveat which screams: “This is just my opinion.”
That said, the same is pretty much true of all property market commentary in this country. Whenever you see a view being expressed you should always start from the position of realising that what you’re reading is just an opinion, regardless of who is saying it or how glossy the brochure that it’s being expressed in. Too often, news headlines and social media posts mindlessly parrot the musings of “experts” and the latest angst-ridden report as if each word has been etched in stone by the hand of God and is beyond the scrutiny of mere mortals.
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We saw an example of this, last month, in ANZ's Property Focus report in which it opined that “housing unaffordability is an enormous problem in New Zealand” and that “a co-ordinated Government policy response is urgently needed to stem continued price rises, acute housing unaffordability, and the large house price swings to which our market is vulnerable”. The report went on the call for "big, bold, urgent" action to stop house prices “rocketing even further” and said a managed supply-induced decline in house prices would be better than the possible alternative, a "painful correction".
Sadly, the report continued to promote the myth that governments can control house prices despite 40 years’ worth of data showing us that they can’t, but it was the report’s proposed solutions that really caught my attention. I had hoped that at least some of them might be innovative, but they weren’t. Instead, they simply repackaged the same tired and discredited nonsense that housing market alarmists have been berating us with for the last 20 years.
The first proposed solution, to “free up buildable land”, ignores the fact that Auckland, the only city in which a lack of buildable land is claimed to be a real issue, still has capacity for up to 137,000 additional dwellings in areas within the metropolitan area - more than enough for our needs over the next 20 years.
The second proposed solution was for “a central Government organised” program to build more houses and infrastructure. Putting aside the embarrassing fact that no one at ANZ appears to have gotten the memo about KiwiBuild, the idea that we’re short of homes and that our “housing crisis” could be resolved by simply building more has now been discredited by a number of commentators and is increasingly being recognised as an error based on mistaken assumptions.
The ANZ report goes on to make the extraordinary claim that initiatives to get first home buyers into the market are “well meaning” but that, in the long run they just push prices up further. Not only is this claim wrong, but it takes an elitist and selfish approach to the issues facing first home buyers and dismisses their plight with the stroke of a pen.
For these, and other reasons, I don’t share the ANZ view that we’re in for “a painful correction”.
The ANZ is, of course, entitled to make claims about the housing market and propose solutions – but a “Surgeon General” type warning on their reports might be helpful in assisting the reader to understand that, like mine, their views are ultimately just opinions.
- Ashley Church is a property commentator for OneRoof.co.nz. Email him at [email protected]
