The island nation of New Zealand is now facing a real estate bubble caused by businesses' demands for more immigrant workers, home buyers, and overall consumers. Amazingly, New Zealand's Prime Minister, Jacinda Ardern, has had the courage to address the nation's housing affordability crisis at its root causes, uncontrolled mass immigration and investor schemes to exploit them.
Prime Minister Ardern recently told a major NZ radio broadcast network, "We've long pointed to the fact, [an economic] growth strategy that is solely built around [the rising] housing market and immigration [inflows] is not a sustainable long-term strategy." The PM was backed up by members of her cabinet, one stating, "The pressure we have seen on housing and infrastructure in recent years means we need to get ahead of population growth."
However, the real estate bubble currently being faced by New Zealand is not an anomaly. In fact, it mirrors a budding dilemma in many other wealthy high-immigration countries including the UK, France, Australia, and the United States - even if these countries' leaders still lack the courage to address it.
Mark Krikorian, director of the Center for Immigration Studies explained to Breitbart News why all major U.S. political parties and mainstream media fail to mention uncontrolled mass immigration's impact on housing prices.
In our collective imagination, we think of our country as having essentially unlimited space, so the idea of immigration raising housing prices just doesn't register with people in this country in the way that it does in England or in New Zealand.
It requires a certain amount of education too. Newcomers aren't settling an inch-thick everywhere in our huge country, they're moving to very specific urban areas where they do have an influence on housing prices, especially when the local or state regulations make it hard to build more housing.
Andrew Good, Director of the Media Standards Project at NumbersUSA went a step further issuing a challenge to American politicians who still do not recognize the magnitude of this issue: "A driver of housing prices is our immigration-fueled population growth, and I don't know how [any politician] can get away from that. They should be working on thoughtful, comprehensive proposals that start with the question, 'Hey, what's the argument for allowing this or that on the demand side?'"
To Americans, perhaps the most confusing aspect of New Zealand's dilemma is the fact that immigration reduction reform is being pushed by the "left-wing" Prime Minister and being opposed by the "right-wing" business supporters; who are instead calling on the Prime Minister to spend taxpayer dollars to subsidize the housing market while mindlessly continuing their current path on immigration.
In the United States, members of the investor class, as well as disingenuous "pro-business" supporters on both sides of the political aisle have long used uncontrolled mass immigration to inflate rental and housing costs in coastal metropolises like Los Angeles and New York City.
For a current example, American legislators are offering $2.1 billion in aid to help keep illegal migrants on the job and paying their rent. And to add insult to injury, President Joe Biden's disastrous immigration bill includes a proposal by U.S. investors who want to spike housing prices away from the coasts by delivering more visa workers to "fly-over" states.
On May 18, when speaking to the major NZ radio broadcast network mentioned above, Prime Minister Ardern received some pushback from the host who echoed the "pro-business" critics' complaint the reducing immigration would slow the nation's overall economic growth:
Ardern: Our intention is to go and say [to employers] "Look, for those areas where you are highly reliant [on foreign workers], what is your [local] school's training and education plan? What is the route that you're doing to ensure that you're engaging within [the labor market in] New Zealand?"
Anchor: But do you accept that New Zealand's growth will slow [with less migration]?
Ardern: Well, actually we've also got a look at what impacts it has on local employment rates, what happens with wages as a result. You know, when we look at ... what's happened in horticulture, or in our dairy sector, they have lifted wages in order to access the domestic workforce. It also encourages training and education to ensure we have a pipeline of [home-grown] New Zealand workers.
For added context on the impact mass immigration can have on a small nation (>5 million), a 2013 report by the Reserve Bank of New Zealand reported that even low migration rates spike housing prices for young couples who are trying to raise families:
Net migration changes are consistent with large housing effects. An additional net inflow that adds 1 percent to the population causes an 8 percent increase in house prices over the following three years and an additional house is built for around every six migrants. This is materially more than the existing number of people per household in New Zealand (around 2.5).
According to Breitbart News, New Zealand's "housing problem worsened in 2020 when the national bank reduced interest rates as migration fell rapidly during the 2020-21 coronavirus pandemic. The low-interest rates made it easier for more locals and migrants to compete for houses amid the shortage. 'New Zealand property prices have gone vertical,' reported macrobusiness.com.au, under the headline, 'How RBNZ [Reserve Bank of New Zealand] pump-primed the property bubble.'"
The Financial Times reported in March 2021:
Home prices have risen steadily in the pandemic, and in 12 months through to the end of January were up 19 percent in New Zealand. The price of a typical Auckland home soared past $720,000, embarrassing Prime Minister Jacinda Ardern.
This is widening wealth inequality, pushing homes beyond reach for the middle class, and not only in New Zealand. Of 502 international cities tracked by Numbeo, a research firm, prices are "unaffordable" (more than three times median family income) in more than 90 percent. In recent years, the tiny minority of affordable cities has been shrinking toward zero.
The nationally popular reset of migration law, which would without a doubt lower housing prices, raise worker wages, and increase the quality of life for native-born New Zealanders is steadily resisted by investors, business groups, and their foreign workers. RNZ.co.nz reported. Migrant Workers Association spokesperson Anu Kaloti used the words "shocking" and "absurd" to describe the immigration reset.
"If you slow population growth, you slow [national economic] growth, and it also slows the economy," said Micahel Gordon, an economist at the country's Westpac bank, which gains wealth when investors borrow money to build more homes, further stoking the crisis.
Amazingly, PM Ardern also rejected claims by NZ business leaders that migrants are needed because New Zealanders are reluctant to work. "I disagree with that totally," she told RNZ, adding:
The kiwifruit fruit industry was able to completely shift the balance of their workforce from overseas-based to a predominantly domestic one through Covid. That's not to say it's not been without its challenges, it has. But this is where we need to work with industry.
"Housing is a fundamental issue to the public," said Andrew Good from NumbersUSA. Unfortunately, "In the United States," he said, "the quality and thoroughness of the policy discussion is astoundingly shallow," as the U.S. debate seems focused on zoning issues. Good is optimistic, however, noting that there is now some reporting about the role investors play in inflating housing prices in the U.S.
For the complete article, please visit Breitbart News.
