Well that was interesting rise in price. A few weeks ago there was a notice in our mail box about the next door apartment going up for auction.
Lyn has been looking at getting her toehold into the Auckland property market over the last year. As a first home buyer she could use kiwisaver and get the first home buyer incentives. Otherwise her income was sufficient to pay the mortgage on a smallish semi-detached or apartment like mine. Easy if I tagged along with her into her first home as a tenant (and rented out my apartment) – but then then it’d have to be big enough for two.
But either the value of the properties were too high and she couldn’t make the deposit and/or the properties are too far out and she went into that trade off between mortgage payments and petrol prices and travel times. Effectively what this translates to in Auckland is that if you want to have a property to raise kids in, then you have to spend so much time in the car that you will seldom see them. And you’ll pay a bomb in ever rising petrol costs.
But the banks have dropped the effective required deposits down to 10% a month or so ago (while we were moving back into my apartment damnit). This naturally started the Auckland property market heating up. And an apartment next door to that of your current partner give some advantages if we don’t break up.
Next door last sold at $212k less than a year ago and no other apartments have sold for higher for over 2 years – mostly they have sold for less. It just sold for $245k this afternoon. A tidy profit to what is almost certainly a speculator.
Of course it means that my property is worth more, but that is of no use if I sell to buy inside Auckland.
You can see why the country needs a housing policy beyond National’s subsidies to property developers like big and expensive roading contracts so they can make more development land available – 50 or more kms from where the available jobs actually are. That is a policy designed to appeal to the very simpleminded – like David Farrar.
So it seems odd that when we are getting rocketing unemployment, we’re now getting a speculative boom in housing prices for anywhere useful, a government fanatically trying to subsidize uneconomic subdivisions a long way from jobs, … This all sounds familar. Next up will be a relaxation in building standards and regulation “cutting red tape” in Farrar palance, ultimately leading to the council paying $6 million on a $10 million dollar apartment building for the damage caused by their lax inspections.
I think I have strayed back to the last time Bill English was making financial decisions for the country.