Betting on the house

Key results signal the country's economy is on the up. So why are voters still miserable?

- Danyl McLauchlan

The property bubble of the early 21st century is one of the great economic and social catastrophes of modern New Zealand history, comparable in scale with the carnage wrought by Robert Muldoon and Roger Douglas. It's not often seen in those terms. Rising house values created the illusion of middle-class wealth, which generated a mirage of political competence that voters rewarded in the polls.

The sustained outward migration of young, skilled workers locked out of the housing market was less visible than closed factories or sharemarket crashes. Blame for the disaster is distributed across leftand right-wing governments, yet Helen Clark, John Key and Jacinda Ardern are still considered icons within their own parties. At least Muldoon and Douglas believed in what they were doing: Clark, Key and Ardern sabotaged their nation's economic development because they wanted to be popular.

We're three agonising years into the slow and still-partial unwinding of the great property bubble. It was the engine that drove much of the domestic economy. People borrowed against their untaxed capital gains to buy new kitchens, cars, boats, trips to Queenstown - and more properties. Without that engine we're a population that works long hours for comparatively low wages, subsidised by a large middle-class welfare system - Working for Families, the accommodation supplement - that the government can't really afford, but can't cut back on because they're unpopular enough as it is.