Philip Macalister: Investment in property a safe bet while so many MPs are landlords
If investing in property is such a bad thing, you have to wonder why so many of our politicians are landlords.
At landlords.co.nz, we looked through the latest register of MPs' pecuniary interests and discovered that our 121 MPs have interests in nearly 300 properties. The number of properties is probably much greater than that as more than half the MPs have interests in trusts and that allows them to have an interest in an asset but not reveal it publicly.
In many ways the register is a reflection of how New Zealanders go about investing. Of the MPs who don't own property, two are Auckland Central MP Nikki Kaye and her Labour challenger, Jacinda Ardern, who have both commented on how hard it is to buy in Central Auckland.
We often hear that expression that turkeys don't vote for Christmas when we talk about politicians. That saying is true too when it comes to property investment.
Politicians love to bash property investors and carry on that we invest too much in property and not enough in the productive sector, but they don't lead by example.
And it's not just the current crop of MPs who are investors. Former Prime Minister Helen Clark owned a few rentals and the Greens even had their own cunning scheme where they set up a fund to own residential property in Wellington, which was then rented out (to its own MPs no less).
Although there is all this talk that politicians want to suppress the property market and keep house prices down, it will never happen for many reasons.
One is the vested interests of politicians. A second is that it is unwise for any government to start intervening in markets. But, perhaps one of the bigger reasons is that property is a significant part of our economy. It's not just investors. It's banks, real estate firms, property managers and valuers, plus all those maintenance people, from plumbers to glaziers and painters. Rising house values stimulate the wealth effect which encourages people to spend more money. There is nothing wrong with that, as long as it is reasonable rather than avaricious.
This year's Budget, thankfully, was a non-event for property investors. Maybe that's no surprise as property investment is heavily the domain of National MPs.
Now we need to know how heavily leveraged those properties are and how many of our MP's will end up in the high, and growing cohort of foreclosed landlords. CAN a bankrupt remain an MP?
No wonder Key and his mates reject a capital gains tax. No wonder there is precious little focus on encouraging investment in assets that add value to the economy.
Until governments put the country's interests ahead of their vested interests, NZ will continue its decline.