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Home / New Zealand

Labour must dig deeper in foreign buyer data

Fran O'Sullivan
By Fran O'Sullivan
Head of Business·NZ Herald·
17 Jul, 2015 05:00 PM5 mins to read

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Labour Party MP Phil Twyford admitted he considered buying data from Quotable Value. Photo / Bay Of Plenty Times

Labour Party MP Phil Twyford admitted he considered buying data from Quotable Value. Photo / Bay Of Plenty Times

Fran O'Sullivan
Opinion by Fran O'Sullivan
Head of Business, NZME
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Andrew Little should take a leaf from the political master's playbook and stay the course when Labour next goes big with a major issue like its Auckland housing hit.

Labour's slightly on the back foot right now. But it doesn't have to be.

If the party's key researchers - like Rob Salmond, who finessed the leaked sales data from a top Auckland real estate firm to underpin the party's claim of disproportionate Chinese investment in the Auckland housing market - are made of stern stuff they will now further test their analysis.

The easiest way to do this is not by using electoral rolls or Census data as Salmond did. They are already out of date when it comes to a matching exercise with the sales period he analysed: February to April this year covering 3922 Auckland property sales by Barfoot & Thompson agents.

What Labour should do is spend some funds and buy data from Quotable Value itself (something that Labour MP Phil Twyford, who ran the story, admitted he considered) so they have a tighter, fact-based arsenal when the issue is next raised.

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The party's use of the Barfoot & Thompson data was the topic du jour when Labour held a soiree for the business community this week.

There had already been plenty of angst among Little's own side. Some Labour Party members resigned - in one case very publicly.

So, what better time to face down critics - including a few party insiders also present at the Auckland gathering - who had accused Labour of "playing the race card" or resorting to "dog whistle" politics.

Problem is Little did not sally forth with the courage of Salmond's research. There was an element of hand-wringing that evening over how the media had played the Twyford story and a few of the wise heads in Labour's parliamentary ranks intimated their more recent colleague might have over-egged the story.

Which is a little puzzling, given the Labour leader's smart press secretary Sarah Stuart was also involved with the strategy on how the story played to media.

Discover more

Business

Poll boost for Labour

17 Jul 04:41 AM
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Editorial: Solid data on buyers only place to start

17 Jul 05:00 PM
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The secret diary of ... A non-resident foreign investor

17 Jul 05:00 PM
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John Armstrong: National off-guard over housing

17 Jul 05:00 PM

Political insiders at Labour's bash in Auckland recognised Little's game.

But it's never a good policy to indulge in a blame-shift when news media are on the guest list.

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The point is there is a major issue in Auckland that must be addressed.

If Labour paid some cash they would be able to find out just who owns the 1500 properties their analysis suggests are owned by Chinese, either residents or from the mainland.

If they wanted to genuinely avoid racist claims they would dig out the ownership of all 3922 homes that were sold and present the full mix: how many residential properties were sold to offshore owners - and from which countries; and how many to New Zealand owners.

The information won't be perfect as some transactions are routed through trusts, companies and family members.

But it will give Labour a renewed platform to take this story further and shame the Government into starting a full register of foreign transactions.

The Government does have legislation working through Parliament. But it does not go far enough to capture the "family homes" that are being bought as investments. Its focus is on tightening the tax net and ramping up money-laundering measures; something which China has asked the Government to do.

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The reason why valid data are needed is so steps can be taken to ensure supply does match demand and to curb demand when there is no way sufficient supply can be ramped up quickly to take the pressure off the housing market in the interests of our own citizens.

This is a major issue elsewhere. It is also one we should be able to talk about and debate without sparking charges of racism.

In Vancouver, which has also had a major house price boom, one of the largest real estate companies opened up by saying more than one-third of all the single-family detached homes it sold over a one-year period went to people with ties to mainland China.

The Globe and Mail story quoted Macdonald Realty saying 33.5 per cent of the 531 single family homes sold by its Vancouver offices went to a mix of recent immigrants and Canadian citizens.

The buyers - like those suggested in Labour's Auckland-based analysis - tended to spend more money with the average cost of a house sold to these clients topping $2 million, compared to $1.4 million on average. Labour's analysis suggested Chinese clients made up more than 49 per cent of all sales topping $1 million in the Barfoot and Thompson data.

What's interesting is an executive from the Canadian firm had no problem giving a glimpse into the influence of mainland Chinese money on Vancouver's real estate market, among the most expensive in North America.

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What's so hard about doing the same here in our most expensive market?

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