Literature Review (800-1000 words)

The literature review is appropriate and conveys an understanding of academic literature that will inform the proposed project. The literature review has already begun. * What other people say or know? * Read reference, use own language and relate to our issue or project subject. * Focus on answering project issue / aims of project; * 15 references in own words; paragraph; * how to reflect to own project, what issues;

1 Article one * The warning by Reserve Bank governor Graeme Wheeler in February that the nation's housing market -- particularly in Auckland -- was at risk of a "sharp correction, leading to financial instability" (a polite way of saying banks might get into trouble) didn't appear to alarm many. * As Charles P. Kindle-berger says in his seminal Manias, Panics and Crashes: A History of Financial Crises: "Speculative manias gather speed through expansion of money and credit or perhaps, in some cases, get started because of an initial expansion of money and credit. Easy credit. Q1 * Risk-weightings at the "standardised banks" such as Kiwibank, TSB, SBS and the Co-operative Bank start from 35 per cent, but a Reserve Bank spokesman told North & South that risk weights for the Big Four's housing loans "are generally between 26 and 31 per cent". Consequently, a $100,000 mortgage maybe counted as only a $26,000 loan on their ledgers -- meaning banks can hose the housing market with money since they have to hold less cash in their reserves. Q1 * "I believe this is finally when the migration numbers are becoming a reality. This surge in population growth is beginning to add to demand and the earliest indications are in surging asking rents for homes in Auckland," he told North & South. "The migration boost will be keenly felt through 2015 and the biggest increase will be through the first half of 2015. We expect to see significant increases in demand for housing. Mythical housing shortages of the past will become a reality and we expect to see that being reflected in the residential rental market. Q4

(THE MADNESS OF THE AUCKLAND HOUSING MARKET. (cover story). (2015). North & South, (349), 34-41.) http://eds.b.ebscohost.com.ezproxy.northland.ac.nz:83/eds/detail/detail?sid=e7294beb-9ba7-46f7-b057-2f50ba58e05d%40sessionmgr114&vid=0&hid=114&bdata=JnNpdGU9ZWRzLWxpdmU%3d#AN=101746935&db=anh

2 Article two * At a time when both the government and the Auckland Council claim the city faces a critical housing shortage, it's ironic that the number standing empty is more than enough to fill the gap. A report by the Auckland Housing Accord put the cumulative shortfall at about 20,000 dwellings. A ministry briefing to Building and Housing Minister Nick Smith post-election came close to that, estimating a shortage of 18,000 homes and predicting that would rise. * Chinese buyers think property here is "a steal", particularly with our dollar falling against the yuan. And with no restrictions on foreign investment, we're happy to take their money and welcome them with open arms. Q6 * From land banking by foreign investors who see New Zealand as a bargain-priced bolt hole to families future-proofing their children's education by buying a second house in a desirable school zone. Q6 * New Zealand is seen as a safe bet, says Rankin, buffered from problems affecting the rest of the world. Q6

(WANE, J. (2015). RUNNING ON EMPTY. North & South, (349), 44.) http://eds.b.ebscohost.com.ezproxy.northland.ac.nz:83/eds/delivery?sid=6ec8ac62-a5bb-487c-ad0c-15501d163ff1%40sessionmgr110&vid=1&hid=114&ReturnUrl=http%3a%2f%2feds.b.ebscohost.com%2feds%2fdetail%2fdetail%3fsid%3d6ec8ac62-a5bb-487c-ad0c-15501d163ff1%2540sessionmgr110%26vid%3d0%26hid%3d114%26bdata%3dJnNpdGU9ZWRzLWxpdmU%253d 3 Article three * "These huge hikes in home values and pending restrictions on investors saw many look to move or invest outside of the Auckland region for more affordable homes or better rental yields during 2015. "This resulted in an increase in activity and demand in previously slow housing markets in upper and central North Island centres including Hamilton, Tauranga, the Waikato district, Hawke's Bay, Whangarei and Rotorua." Q2, Q3 * Home values in the Auckland region increased 22.5 per cent - from $761,858 in December 2014 to $933,264 in December 2015. They rose 4.1 per cent over the past three months, but only 0.2 per cent during the final month of the year. * Ingerson said 2016 looked positive for most of the country, with transaction numbers picking up and values increasing in many areas outside Auckland. "With the various Government and Reserve Bank restrictions now beginning to take effect, and foreign buyers apparently much less active, our expectations are that Auckland values will drop a few per cent over the next few months. Q1, Q4&Q5 * The easing of the LVR restrictions outside Auckland would allow more first- home buyers to purchase. Q1,Q4

CHLOE, W. (2016, January 14). Auckland housing market cooling off. Nelson Mail, The. p. 7. http://eds.b.ebscohost.com.ezproxy.northland.ac.nz:83/eds/detail/detail?sid=270a82bb-a92c-4664-83dc-435668292806%40sessionmgr102&vid=0&hid=114&bdata=JnNpdGU9ZWRzLWxpdmU%3d#AN=NEM16011400071110746920-BP&db=anh

4 Article four * Motu Economic and Public Policy -- a not-for-profit, independent research institute -- has research showing that a one per cent increase in the population of a city relative to its housing stock increases house prices, on average, by 2.2 per cent. Thus, if the number of houses in Auckland could be increased by say five per cent (an approximate lift in the Auckland housing stock of 25,000 houses), then house prices should be around 11 per cent lower than they would otherwise be. Bench marks

HOUSEBOUND. (2015). North & South, (350), 12. http://eds.b.ebscohost.com.ezproxy.northland.ac.nz:83/eds/detail/detail?vid=13&sid=d6216ea6-a53a-4bdb-808d-cbf97dbe9fa8%40sessionmgr113&hid=114&bdata=JnNpdGU9ZWRzLWxpdmU%3d#AN=102128632&db=f6h 5 Article five * A bank economist is predicting Auckland's housing market will gradually cool over the coming months, thanks to tighter lending and tax rule changes from October. Westpac economist Dominick Stephens said tighter mortgage restrictions for Auckland property investors, a requirement that non-resident buyers supply an IRD number and tighter rules against speculation, could well have a greater impact in Auckland than elsewhere. October 1 will see a tax introduced on capital gains for most housing sold within two years of purchase, by which time interest rates are likely to be softer as well as the economy. Q1, Q5 * The outlook for other regions was more positive. Wellington, for example, had a slightly more positive outlook thanks to falling interest rates and a relaxation of loan-to-value-ratio (LVR) limits outside Auckland. Q5

CATHERINE, H. (2015, July 24). Economy may soften Auckland housing market. Waikato Times. p. 6. http://eds.a.ebscohost.com.ezproxy.northland.ac.nz:83/eds/detail/detail?sid=0f86b2e0-7d00-415e-831b-b5f6136d8fe4%40sessionmgr4005&vid=0&hid=4203&bdata=JnNpdGU9ZWRzLWxpdmU%3d#AN=WKP15072400061104173772-BB&db=anh 6 MBIE – Ministry of Business, Innovation & Employment

* A comparison of migration with growth in rents and house values shows some historical relationship between rents and net migration but we do not have enough data to exam. Q4

http://www.mbie.govt.nz/info-services/housing-property/sector-information-and-statistics/new-zealand-housing-and-construction-quarterly-nzhcq

Contact email: housinginfo@mbie.govt.nz

* International student numbers on the increase again. A total of 84,856 international students were approved to study in New Zealand, an increase of 16 per cent from 2013/14, the second year-on-year increase. China has remained the largest source country of international students (27 per cent) followed by India (23 per cent) and South Korea (six per cent). The numbers from India continue to rise sharply. Q4 * One in six international students gained residence. International students have become an important source of skilled migrants for New Zealand and in other OECD countries. By 30 June 2015, 17 per cent of students had transitioned to residence five years after their first student visa. In 2014/15, 43 per cent of skilled principal migrants were former international students. China was the largest source country of residence approvals in the Parent Category (50 per cent) and slightly behind India in the Partnership Category (India 16 per cent and China 15 per cent). Q4 & Q6 http://www.mbie.govt.nz/info-services/immigration/migration-trends/trends-and-outlook/2014-15 http://www.mbie.govt.nz/publications-research/research/migrants---monitoring/migration-trends-and-outlook-2014-15.pdf

7 Statistics.govt.nz

http://www.stats.govt.nz/browse_for_stats/people_and_communities/housing.aspx

8 Whangarei District Council 9 NorthTec international students’ data

Issues: Cannot find so many relative recourses about Whangarei housing or property for recent years. So decide to do more research on Whangarei city council, governmental statics websites and google scholar. stastic

1. What are reasons result in the housing market of Auckland cooling off? Tighten credit; 2. Is there an increasing demands of real state in Whangarei since Auckland’s housing market cooling off from last year? Price increase 3. Whether the central of housing market would shift from Auckland to Whangarei? 4. What are the potential stimulus as the result of the growth of housing price in Whangarei? The migration numbers 5. Are there ways or plans about curb policies, economic policies or accounting policies to attract potential investors in Whangarei? Gathering tax-free income from the capital gains when you sell; 6. Why Chinese prefer to buy property in New Zealand?

Questions:

1.