The Rise of the Slums – “Eviscerated by rents and property prices”. Auckland’s Working Poor

living in squalor in nz

The Kiwi lifestyle for many migrants could involve living in a shed.

Spare a thought today for the migrants that wash-up in Auckland looking for the ‘Kiwi lifestyle’ only to become the country’s new working poor. Unable to claim benefits to put  bread on the table, unlike most Kiwis, they’re reduced to living in squalor to make ends meet.

One postman has written on reddit about the rise of the urban slums in Auckland, in effect shanty towns are growing up all over the place. Migrants are living in squalor, you could be forgven for thinking New Zealand has competed its descent into third world status, because you’d probably be correct

Living in squalor: I’m seeing these rudimentary units pop up almost daily now…

http://imgur.com/MUUjMAB

I’m currently a postie in Auckland. Yes- I know many of you are already fed up with the constant barrage of posts surrounding the (mainly) Auckland housing debacle, but here’s something in particular I don’t know many people are aware of.

As a postie you have to know your runs like the back of your hand; as a result you tend to see any changes emerging immediately and here is one of particular interest to many right now I would think. I’m noticing a tremendous amount of these rudimentary units popping up in the back-yards of many a quarter-acre dream property.

To see these things being built at this rate seems somewhat a sign of this difficulty that an entire generation are facing right now – the ability to afford shelter. Recently on r/newzealand we’ve seen a variety of good discussions touching upon this national debacle- restrictions on supply, the voter base, immigration and most recently the idea of a Land Value Tax.

I’ve had a brief look inside one of these things and it’s more or less living in squalor; no insulation, barely enough space to swing a cat o’ nine tails, improvised or shared cooking and washing utilities. A really sorry sight to see first-hand.

I’m seeing it before my eyes now – people are being eviscerated by rents and property prices… an under-class of working-poor.

This is poverty/destitution through and through. Or maybe for some it’s an alternative to crippling rent.

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John Key dilly-dallies around the edges on runaway property prices

Alongside diffusing the nation’s reputational risk of being perceived as a tax haven, John Key is once again seeking to reassert himself on the ever-growing angst about foreign investors gaming the New Zealand housing market and driving up prices. National has been loath to adopt a muscular policy posture in which to wrestle with this eel.

Auckland housing prices, in particular, have remained on fire for five years and last October’s introduction of a bright-line test on property speculators, long after the stable door was blown off its hinges, failed to douse the flames. Auckland real estate is now more expensive than Sydney’s…

His default position has been to talk down the significance of the foreign investor factor. You may recall last July he floated the idea of imposing a stamp duty on foreign buyers, to take the heat out of housing market. Treasury actually suggested the measure in their pre-Budget advice last year. It’s the approach Singapore and Hong Kong use, imposing hefty stamp duty on foreign buyers, principally to protect their housing from being gobbled by their omnipotent brother, while maintaining a thriving trading relationship.

But now John Key has junked the idea, claiming a land tax would actually be a more effective tool. He has to be seen to be doing something. As much as most New Zealanders’ are far from convinced that Labour is ready to govern, their core policy commitment to ban non-resident foreigners from buying existing homes commands emphatic public support, and crucially – from middle New Zealand…read on

Note: Most politicians, and many Kiwis, own investment properties – these are their retirement investment funds. Nothing is being done to curb the growth of shanty towns in Auckland. It’s a free for all out there, and guess who comes off worst?

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18 thoughts on “The Rise of the Slums – “Eviscerated by rents and property prices”. Auckland’s Working Poor

  1. I have used the Argentina analogy to describe what I think of Australia. However, the analogy is even far more applicable to New Zealand. New Zealand is a country whose resource abundance is inversely related to its human capital. It is as if the gods granted New Zealand with so many natural advantages that they felt compelled to leave it to the idiots to restore a balance.

    Argentina’s decline into perdition is eerily similar. Both countries were agricultural powerhouses where the natural resources had, in part, rewarded a population of intellectually slothful people. Both countries had incompetent and useless governments that promised the people benefits from the public coffers. Moreover, both sets of electorates elected ignoramuses and then rewarded them by re-electing them. The sensible people left and the idiots remained. I find the Argentines and Kiwis similar in the sense that they are both more adept at marketing their abilities rather than actually delivering results.

    • Admin,

      I think that I’m entitled to a right of reply here.

      safefromnewzealand,

      You’ve commented on the inadequacies of NZ, Argentina and Australia. Actually Australia has done relatively well, considering it doesn’t have most of Argentina’s geographical and environmental advantages, the future of course, is another matter. As to ‘intellectually slothful”, Australia has produced its share of Nobel Laureates, and pioneered electoral and social reforms. You’re basically pontificating and making ill-informed generalisations.

      I’m not in position to contest your observations in regard to life in NZ and Switzerland. Like Singapore, Switzerland has geographical advantages not available to NZ or Australia.
      However, you haven’t acknowledged the deeply sinister foundations of Swiss prosperity. For generations Zurich financiers have laundered blood money from most of the world’s nasty regimes and they weren’t called “Hitler’s bankers” for nothing. Secret Swiss bank accounts, of course have been notorious. In a just world, the whole corrupt system would have been audited and reformed long ago. Do you think that the FIFA scandal would have been exposed without the Americans forcing the hand of the Swiss authorities?
      So enjoy your life in Switzerland, the scenery is certainly beautiful.

      • Hi Russel,

        I apologise, but I was not trying to make this about Australia. My only point was that the problems applying to Australia are much more pronounced and severe in New Zealand.

        Australia has done very well internationally in terms of quality of life, GDP per capita, etc. In fact, Australians have the highest median net wealth per adult of any country in the world. Australia is one of most popular emigration destinations for qualified Europeans.

        However, I do have concerns about Australia’s future and lack of competitiveness. For example, I read how some local Liberal politicians in Melbourne rezoned a formerly industrial large area of land near the Melbourne CBD from industrial to dense residential. Incidentally, some Liberal party donors bought the land shortly before the change, producing an ill-gotten windfall for them. A similar thing happened in Queensland. Australia has built a property pyramid whereby the government restricts supply of land and inflates property prices artificially to the benefit of those who bought land many years ago. Diverting valuable resources to fund property speculation is counterproductive. Look at the appalling levels of housing debt in Australia, much of which foreigners subsidise thanks to Australia’s negative capital account deficits.

        Australia had some great times during the boom years thanks to China. Unfortunately, the incompetent Australian political class thinks they created the success rather than a confluence of one-time factors from China. They promise too much to the electorate and Australia is beginning to run deficits. Like much of the developed world, living standards have stagnated. Australia has weathered this better, in part, because foreigners migrate and help boost GDP. Unfortunately, the economy beneath the surface is one marked by high costs and low productivity.

        I think that Australia benefited from natural resources boom such as the wool boom of the early twentieth century or the recent mining boom. I do not see much higher up the value added food chain industries such as car manufacturing, pharmaceutical research, etc., which is disquieting.

        Lastly, I think you overstate how much of Switzerland’s prosperity is due to banking. One third of the country’s exports consist of pharmaceuticals. Unsurprisingly, the Swiss government protects big pharma. The whole notion of “dirty money” stems largely from bankrupt politicians who hate places with competitive tax regimes because it allows successful people to leave or park their money elsewhere. The USA is the most sanctimonious country on this topic, yet it is the number one place for dirty money in absolute terms. One can set up Delaware corporations with anonymous beneficiaries, some of the very same things for which the US reproaches others. One never sees Swiss or Singaporean politicians vilify people for properly diversifying some of their wealth offshore and reducing political risk. International diversification is paramount in an age of competitive currency devaluations and governments that can confiscate your wealth without due process. It is much harder to seize foreign bank account or property. Kim Dotcom would have better protected himself against the Kiwi vultures if he had kept some his wealth offshore.

        As for FIFA, I think we know that the US launched its witch hunt because Blatter refused to rescind awarding the World Cup to Russia. Everyone knows that FIFA was corrupt, but the US government is merely trying to deflect attention from its own corruption and poor governance. When the US government stops stealing people’s property in the form of civil forfeitures or stops fomenting wars abroad, then it might be in a better position to prosecute corruption. FIFA’s corruption has not harmed me, whereas corrupt governments harm everyone.

  2. Also want to say buying real estate in N.Z means nothing unless you have political power or a private security force and a team of lawyers,anyone can legally access your property in N.Z you really have no right to defend a property even to fence it against felons or defend it ,not really yours then is it? Let’s go try walk on any government officials property and find out how the law is different for the scum…you and the rulers

  3. Also for admin if you get a chance can you post the window washer story,those of us that frequent the Auckland CBD may have some feedback ,maybe not as now they are also doing this in the provinces.

  4. This country was never that good ,the boom and bust economy destabilises everybody and creates a weird state of constant anxiety and a need to fleece the neighbours for the most recent fad .

  5. New Zealanders must be desperate if they’re considering adopting an Australian policy in regard to foreign investment in real estate. I’m sure a few years ago they would have sneered at it as being ‘racist’ or ‘xenophobic’, now they understand.

    It’s fascinating to watch NZ’s ‘descent into third world status’, from outside the country. It’s happened before–measured by per capita GDP, Argentina was one of the richest nations in the world a century ago, then its institutions failed. The disturbing lesson for Kiwis is that the country has not been able to recover its First World status.

  6. There is already a shortage of available homes in Auckland then 67000 new immigrants each year most of whom end up in Auckland,8000 new homes built in Auckland each year ,the worlds most liveable city ? ? If you don’t mind living in a cardboard box and driving to work in horribly congested traffic.

    • I believe that I’ve stated this before but might be worthwhile repeating;

      There are more houses built in one COUNTY of one state per year that in all of NZ.
      Yet, with such a dearth of new housing, the building practices remain stuck in antiquarian nostalgia.
      I have tried to introduce some high speed and high quality practices and techniques, but most of the time this falls on deaf ears.
      I get quite frustrated as so much can be improved by using available products/practices all ready used.

      Funny story: I was talking to a builder telling him about the style of windows and doors used elsewhere. He said “they are STARTING to introduce those here [and before he realized what he was saying], they call them “smart” windows”. He kind of sheepishly changed the subject.

    • A large part of the reason for the housing shortage, not just in Auckland but around New Zealand, is that the local governments don’t zone enough land for housing developments. This is done deliberately to keep the prices high. The same tactic is done in Australia, and it is done to keep the investors happy.

      Two resources which New Zealand has in abundance are land and food. If the prices are high on both of these, there must be an artificial inflation of some kind. Looking at them, it’s easy to see where the priorities are. The New Zealand government would rather have people DYING of malnutrition related diseases and illness connected to mouldy, cold homes than miss out on getting their slice of the profits.

      In other words, greed is a higher priority than keeping the population alive and thriving. It’s important to understand that the New Zealand government puts governing the country as a second priority; its first priority is to rape, pillage and plunder as much as possible, to line to pockets of the politicians. In every way, politicians are the pirates of the 21st century.

      • It’s much easier for people to blame “outsiders” when their own leadership repeatedly fail them, and the alternative do not dare upset the status quo because they know how their bread is buttered.
        A good idea to remember is: “Revolutions only happen when people can hope of a better future”.
        In the situation of New Zealand, that’s questionable – people are concerned about their reputation presented to others, and have invested so much into the presentation of “clean, green, laid-back, non-materialistic, egalitarian, incorruptible” … that any other image would damage their take of tourism or investor dollars.
        In other words, this is a ponzi scheme waiting to collapse. And since nobody wants to be the last people in (they are the ones not to see any payout) … the show will go on 🙂

  7. It is just not the immigrants. “Investors”, a cover for lazy and greedy real estate speculators, buying up homes en masse and letting tenants pay the mortgage to later walk off with the tax free loot, have drive up house prices to the lever where normal people can no longer afford them. Homes are to live in, not to invest in. We need a change and the house prices need to be cut by two thirds to get down to a realistic market value.

  8. Strange how many Kiwis have their heads buried so far up their arses that they can’t see that the Asians are invited here and their investment in housing is welcomed by past and present governments.I like the line from the Kevin Costner movie Dances with Wolves,the Indian chief asks Costners character how many white men will come to America ,he responds that there will be as many as there are stars in the sky.Same goes for Asian investors!!! It’s a policy change which is required ,we have a relatively low wage economy and as long as our doors are wide open to foreign investement N.Z houses will be unaffordable to our low wage earning citizens ,pretty simple really ,let’s hope WINZ has a huge stockpile of cash because when people realise that going to work everyday will not provide them with the required funds to provide food ,shelter and basic services I think many will give up and become WINZ customers.

    • Well govt has no control over what is going on.Plus its the kiwi greed or ingenuity and no care attitude towards immigrants who are actually running auckland show. Immigrants are also to be blamed for their ignorance. On which the local kiwi thrives. But most of them are in a bottomless pit. Especially who dont have money to bring to nz.

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