Peter Lyons: Nation cannot get rich by buying and selling houses
A woman confronted me recently about an article I had written.
She said: "My husband says you are wrong. Housing is the best
investment because you can leverage it, they are not making any
more land and people always need a place to live."  He is
correct on all counts. So why are some economists prattling on
about the rampant housing market in Auckland with medium sale
prices nudging $600,000. Here is why:  A country becomes richer
by increasing its production of actual goods and services. This
is measured by Gross Domestic Product. This ultimately
determines average incomes in a country. New Zealand's GDP is
increasing at the pace of a three-legged turtle.  The sale of an
existing house represents a transfer of assets between the buyer
and seller. There is no new physical output or incomes or
employment generated except for real estate agents and bankers.
Housing inflation in New Zealand over the past decade has
largely been matched by incre