Labour have been widely criticised for their highly questionable use of very limited data and the conclusions they promoted, absent any facts. And they are ignoring the wider issues of housing in Auckland.
Alan Wilkinson posted this comment at NBR and here.
If you want to see mass stupidity in action, here it is.
The facts are wrong:
- it is NZ resident Asians buying, not foreigners;
- there is a serious supply shortage in Auckland with new builds way below normal and below the other NZ cities despite Auckland having the most growth over the past decade;
- Auckland has fewer vacant homes than normal and than the rest of the country; rents are rising because of a shortage of rental properties;
- foreign investment is an asset and resource, not a problem;
- the sellers benefit from high prices, not the buyers;
- the constraints on development are political and bureaucratic, not infrastructure; the property market has been wrecked by the destruction of property rights, not by the market participants;
- taxes can only increase prices, not reduce them; the long term value is determined by those who want to live in them, not those who want to buy them for investment;
- young, skilled, hard-working Asians will be the foundation of future generations of NZers and are a vital counterbalance to our ageing European demographic and unskilled Polynesian youth.
We have a choice between managing the explosive mix productively or sliding into an incompetent, poverty-ridden backwater. It is clear where Labour would take us given the chance.
I doubt that Labour wants New Zealand sliding into an incompetent, poverty-ridden backwater but they seem to have used data to prove one thing – 39.5% (give or take a margin of error) of property buyers in one limited data set have Chinese type names – but then expanded that to fit warnings they wanted to make about a supposed coming tsunami of Chinese investment money.
There’s indications of more common sense and proof of Alan’s claim like “it is NZ resident Asians buying, not foreigners”.
David Farrar suggested Labour may be very embarrassed when we get the actual data and linked to this at NZ Herald article by Lincoln Tan:
About 50 Chinese buyers packed a real estate agency office in Epsom, and snapped up 23 sections within minutes of release yesterday.
James Law, principal agent at James Law Realty, said more than 100 people, all ethnic Chinese, registered interest with the agency to purchase sections in a Hobsonville subdivision.
“All potential buyers were notified, but it was the Chinese who made their decisions the fastest,” he said.
All the buyers were required to present their passports on signing the sale and purchase agreement.
Mr Law said all were either New Zealand citizens or permanent residents.
When Twyford launched Labour’s Chinese attack on The Nation a week ago:
Tell us this new data. Tell us exactly what it shows.
Phil Twyford: So this data is the comprehensive sales record from a major Auckland real estate firm. It includes about 4000 individual records. It’s every house sold in the Auckland region over that three-month period.
What it shows, I think, is striking. Nearly 40% of the houses sold in that period went to people of Chinese descent, and as your introduction pointed out, the Chinese New Zealander population in Auckland, according to the most recent census data, is about 9%.
Now, that is a remarkable discrepancy, and, in my view, it’s simply not plausible to suggest, as many have done in the last couple of years, that the Chinese— ethnic Chinese people who are buying houses in Auckland are all Chinese New Zealanders.
It points, I think, to only one possible conclusion, and that is that offshore Chinese investors have a very significant presence in the Auckland real estate market when you consider that Auckland house prices are spiralling out of control at the moment.
Okay—
Property speculation is rampant, and I believe on the strength of these numbers that offshore Chinese investors are a very significant part of what’s going on.
There are obviously other conclusions that can be reached from Labour’s very weak and limited numbers..
Alan started by saying “The facts are wrong”. Twyford didn’t even have facts to back his claims – his assumptios to fit a narrative may have bee wrong.
UPDATE: Alan has put this in comments but it’s worth adding here:
To add to the instances reported by Farrar, this from NBR (paywalled): I did a little research this week and asked a number of top Chinese Real Estate sales people who I know very well and trust emphatically, what the reality is.
Their responses were largely the same.
Virtually all of their ‘Chinese’ sales are to residents. These people all want to own multiple houses. Most want at lease 3 houses per family unit.
The few that are sold to non residents predominantly are to Chinese people who are in the process of immigrating, simply trying to secure a house at today’s prices to live in when they arrive .
One even pointed out that with the Chinese Stock Market returning well over 100% returns, including the recent collapse, why would a Chinese based investor want to get a miserable and likely temporary 17% return in Auckland Real Estate?
duperez
/ 19th July 2015“Who’s buying Auckland property? …. The facts are wrong: …
– it is NZ resident Asians buying, not foreigners;”
All right already. Before Alan Wilkinson gives ‘the facts,’ the data, the real oil to Phil Twyford and Nick Smith because they don’t have it maybe he could list it all on here. The facts, the knowledge and how he came by it.
Pete George
/ 19th July 2015I’ve shown one set of facts more than Twyford:
Twenty three out of twenty three section buyers were either New Zealand citizens or permanent residents.
Twyford claimed it’s not plausible that may of the 39.5% buyers with Asian sounding names could be New Zealand citizens or permanent residents – with no facts to back it up. It looks like he was either deliberately ignorant or wildly guessing.
Alan Wilkinson
/ 19th July 2015To add to the instances reported by Farrar, this from NBR (paywalled): I did a little research this week and asked a number of top Chinese Real Estate sales people who I know very well and trust emphatically, what the reality is. Their responses were largely the same. Virtually all of their ‘Chinese’ sales are to residents. These people all want to own multiple houses. Most want at lease 3 houses per family unit. The few that are sold to non residents predominantly are to Chinese people who are in the process of immigrating, simply trying to secure a house at today’s prices to live in when they arrive .
One even pointed out that with the Chinese Stock Market returning well over 100% returns, including the recent collapse, why would a Chinese based investor want to get a miserable and likely temporary 17% return in Auckland Real Estate?
Alan Wilkinson
/ 19th July 2015My daughter also sold an Auckland house a couple of years ago to a young Asian couple – residents again. I can see where credibility lies and it is not with Twyford.
kittycatkin
/ 19th July 201523 out of 23 were residents or citizens ? What about the rest of the 23 ? Oh…er….
kittycatkin
/ 19th July 2015Seriously, Alan, has this been published ? It needs to be-published in print, I mean. The voice of reason.
Pete George
/ 19th July 2015I haven’t seen any inclination from Mainstream media to actually do useful research and analysis yet.
Alan Wilkinson
/ 19th July 2015The Herald is just a trashy sensationalist tabloid now unfortunately. They want to start fires, not put them out and they have no-one who knows any economics. Their business columnists like de Boni and Hill-Cone, even now O’Sullivan seem to know nothing about the subject.
Alan Wilkinson
/ 23rd July 2015The Herald finally has a bit of sense on this from two external columnists today who have a clue about economics: Crampton and Whyte. But they’ve also managed to find a couple of “business economists” who don’t have a clue about economics or business from Auckland Uni.
missy
/ 19th July 2015Further to the ‘data’ Twyford released is that he is wrong that all of those 39.5% of people with Chinese sounding names are of Chinese descent. A NZer I work with here knows of two people who were most likely on the list, and whose names by Salmonds analysis were most likely Chinese, however one is of Samoan descent, the other is of English descent. What we need on those figures is a margin of error, what margin of that 39,5% may not be of Chinese descent – or even Asian descent?
Pete George
/ 19th July 2015Rob Salmond has posted about what accuracy he thinks he has achieved.
I’m not sure how that relates to their 39.5%.
One of Rob’s explainers: http://polity.co.nz/content/how-labour-estimated-ethnicity-surnames
duperez
/ 19th July 2015Twyford claims something. He is roundly rubbished. What he said is roundly rubbished.
Down the track Salmond explains the maths and statistical approach to inform and try to ease the criticism by giving the information some sort of credibility. He is rubbished.
Alan Wilkinson claims to have been told some things by some people who have an interest.
Sunday night, a quiet time for a some rational thinking. All the rubbishing and criticism of the Twyford claims, what the information was, how it was gained and the conclusions reached from it, is accepted as untenable.
Alan Wilkinson says what he says and (sprinkle of magic dust!) that has credibility and is suddenly the true, real, 100% story?
Pete George
/ 19th July 2015What Alan has said added to the Herald story is some evidence but far from the full story.
Twyford offered zero evidence of his suggestion that the difference between 9% and 39.5% had to mean substantial overseas purchases.
Alan Wilkinson
/ 19th July 2015I have or can produce evidence for every fact I stated. I live in a town where two thirds of the properties are owned by absentee owners, some foreign. Not one to my knowledge is Chinese. I am sure there are a few non resident Chinese owners at the margin, perhaps even some with hot money, but I would be amazed if it was more than a very small minority. I stay in Remuera every month – am there now – and it is full of Asians. Obviously they are far, far better equipped to buy property than the average NZer who could never afford to live there. Add that as recent immigrants they need to buy a home there is every reason to expect them to be over-represented in the Auckland buyers market. My grandson moved to Remuera Intermediate a couple of years ago and was amazed to find most of his class ate their lunch with chopsticks. He also found that instead of being abused as a nerd he had to work hard to keep up with his new friends and classmates. I have zero sympathy for the ignorant racists.
Howick Boy
/ 23rd July 2015What you are saying is that rich Chinese immigrants are buying in Auckland.
You’ve finally found the truth
Alan Wilkinson
/ 23rd July 2015You mean you’ve finally found the truth. I’ve always said it was Chinese immigrants – who are skilled, work hard and successful. You hate this of course because you are racist. Or have you another excuse?
Farmerpete
/ 19th July 2015We have just developed a 100+ section subdivision which is largely sold. We built numerous houses in the $550 to $750k range. I don’t recall one sale to Asian buyers.
Missy
/ 19th July 2015So, from that I take it of the 39.5% of the sales data that were Chinese sounding surnames, potentially 5.2% may not be of Chinese ethnicity? Apparently the data was 45% of Auckland sales for that period, so I would take it then that potentially 94.8% of 39.5% of 45% of house sales in a three month period are of Chinese ethnicity. Of course I am not a statistician, nor am I a mathematician and am probably looking at it too simply – however, is that not how most people look at things like this? In the simplest terms possible? That is why Twyford was able to fudge people on the stats.
kittycatkin
/ 19th July 2015I wondered which part of China the Kaurs, Patels, Singhs and Wilsons were from.
And we all know that there are who knows how many names like Ching, Law, Tong, Lee, Chung, Ling there are that are not Chinese (Ching is Cornish !) Our roof was done by a man called Wong. He must have Chinese ancestry, but he doesn’t look Chinese at all. Then there’s a Waikato Maori family with a Japanese name from one Japanese ancestor.
kittycatkin
/ 19th July 2015The point about high prices benefitting SELLERS can’t be made often enough, I cannot see how high prices can possibly benefit the buyer. I am no economist, but that seems absurd.
Alan Wilkinson
/ 19th July 2015Another post at NBR tonight:
I sell residential real estate in AKL. 20 out of my 22 listings this year have sold to Chinese and all of them live here. They come as International Students, contributing to a $3bn/yr industry then their parents come out to raise the Grandkids when they reach retirement age. The migrants have cash… because they are migrating… nuff said.
Farmerpete
/ 19th July 2015I meant to asy above that this development was in the wider Auckland area
SteveRemmington
/ 19th July 2015Hi Alan, in your experience do Chinese offshore investors sell homes at a similar rate to purchasing them?
Alan Wilkinson
/ 19th July 2015I don’t have any experience with offshore Chinese buyers and the only reports I have seen from those who have are saying that these are intending to immigrate here so presumably are not planning to sell quickly.
SteveRemmington
/ 20th July 2015Ah ok. Was just wondering due to Twyfords original data had 21% Chinese sounding names selling. I can’t see foreign buyers selling when there cash is so cheap.
Ergo 21% resident sellers become 21% buyers. Twyfords 39% potential foreigners becomes 18% less resident the Chinese people who wish to own 2 or 3 homes(we know this is a high number due to culture).
It’s not unfeasible to say foreign buyers is down Bill Englishes number.
artcroft
/ 19th July 2015Anecdotally I agree from my experience that lots of buyers with Chinese sounding names are residents here, or are intending to be residents. I’ve just got back from Vancouver and they have the same senario playing out there right now. Average house price is 1.4 million Canadian, with lots of resident Chinese buyers. Makes me wonder what the rush is to leave China?
Missy
/ 19th July 2015“Makes me wonder what the rush is to leave China?”
In one word I would say the pollution. Though I will say I have no actual evidence, it is primarily anecdotal in some blogs on expat websites in China. Despite the claims of the pollution reducing it is still a major problem. One of the guys I work with here in Beijing (a NZer who has been here for a couple of years) said that whilst the number of days with extremely high pollution (250-300) had been lower over the last year, the average pollution levels are actually increasing. They like countries that have clear fresh air. Many young people especially want to bring their kids up away from the pollution, and in places where they will be healthy.
In saying that another issue that is especially a problem in Beijing is attracting the expats in to the city. Anecdotally again, but there have been a number of reports of foreign companies having trouble attracting their own nationals to come and work in Beijing, as are some embassies. I know someone at the German Embassy who said that they can’t find diplomats who want to come to China because of the pollution, so some that are here now may end up doing two terms in Beijing.
9mm
/ 20th July 2015Not to mention China’s strict laws, which ensure a nil recidivism rate for anyone convicted of fraud or embezzlement.
BUCK WIT
/ 20th July 2015is that you Lynn? just wondered as 9mm seems about your length.
9mm
/ 20th July 2015I guess you’d know Buckwit 😦