House rage - we're right to be angry

'Anger' from the new Disney-Pixar movie Inside Out. Image / supplied

Politicians ignored the warning signs, the well-heeled took advantage and now housing equality is a farce

All parents want what's best for their kids. It's an evolutionary imperative, hard-wired into some part of the brain that I don't know the name of because I never paid attention in biology classes.

So I should not be surprised that I get really angry when I think about my kids' struggles to own their own homes.

(As I write those words, I am aware of how absurdly middle-class they sound. Thousands of kids are living in expensive, rented accommodation that is cold and damp and is making them sick, even killing them).

Anyway, my son, at the age that I was when he was born, has just become a father and made me a grandfather. He and his wife are in their first home, which they bought after saving every penny they could over 10 years including a year working as teachers in Korea, living frugally in villages an hour apart.

But if they were trying today, they couldn't do it. In the year to May, the average Auckland house price went from $502,100 to $616,500. It jumped by a quarter or, in raw dollars, by more than twice the average salary.

That's absurd. It's obscene. And it makes me bloody angry, because my daughter has watched that average figure climb, all the while wondering whether her dream of home ownership is evaporating before her eyes.

Competing at auction with developers and investors, local and foreign, either well-heeled or exploiting tax breaks and leveraging off massive paper equity or both, she's like a toddler kid fighting a heavyweight with one hand tied behind her back.

Now 29, she was born into a house her mother and I had just bought for $68,000. It wasn't much; a bit run-down, on a south-facing slope. But it was in a suburb that has since become fashionable.

In those 29 years, inflation has been 136 per cent. If house-price inflation had been the same, her birthplace would have an asking price now of about $160,000. Last time it sold, more than a year ago, it fetched more than $1 million - an increase of about 1400 per cent. Presumably you could add at least a quarter to that now, too.

I am not alone in feeling angry about that. And I was not alone in seeing it coming, a long time ago. After Labour's landslide victory in 2002, I wrote to Finance Minister Michael Cullen, imploring him to use the Government's huge mandate to seek from National a bilateral agreement on policies to disincentivise investment in residential property. I didn't get so much as one of those offhand form-letter acknowledgments.

If the fact that the residential-property spree was diverting money from productive enterprise, lowering the tax take and pushing house prices up was apparent 13 years ago to me - a man who couldn't balance his own chequebook - I think it safe to say that quite a few people who had the minister's ear knew all about it.

Cullen did nothing and Bill English, who took charge in 2008, followed suit. Labour leader Phil Goff took a capital gains tax policy into the 2011 election, but the party was already toast, and political capital it might have spent on the idea had long since been squandered. National MPs, 40 of whom own investment properties, are unlikely to take the view that house-price inflation is a bad thing. I'm angry about that, too.

I'm angry that people I used to call friends, who worked in high-paying and productive jobs, some of them advancing the interests of the socially disadvantaged, now ruminate in semi-retirement, devoting a few hours a week to maintaining their property portfolios.

I'm angry that simple-minded liberals cry "racism" when this newspaper publishes figures that suggest - no bolder claim than that is made - that Chinese buyers are exerting a powerful influence in the property market. I'm angry that debate has become about xenophobia rather than whether non-resident foreign investors from whatever country you care to name are crushing our young people out of the market.

I'm angry that the Housing Minister dismisses the figures as flaky rather than instituting an inquiry to establish whether they are valid. I'm angry that the Government, far from shutting the stable door after the horse has bolted, is wondering where the door is, or rather denying the existence of doors.

We have betrayed a generation and generations to come and I'm angry as hell about that. In just 15 years of this century, we have destroyed one of the great achievements of the last one: making New Zealand a place where anyone who wanted to could have their own place to call home.

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