The social damage wrought by homes as commoditites

Written By: - Date published: 7:04 am, March 4th, 2017 - 82 comments
Categories: capitalism, class war, housing, International - Tags: , , ,

This report makes for depressing reading:

UN report lays bare the waste of treating homes as commodities

A massive shift of global capital investment has left homes empty and people homeless, argues Leilani Farha, UN special rapporteur for housing

The UN special rapporteur for housing, Leilani Farha, will highlight the devastating human rights impact of society’s tendency to view houses as financial commodities rather than homes for people, in her report to the UN this week.

Farha, who has been UN special rapporteur for housing and human rights since May 2014, has published a hard-hitting report[pdf], which she presents to the UN in Geneva on 1 March. It details the shift in recent years that has seen massive amounts of global capital invested in housing as a commodity, particularly as security for financial instruments that are traded on global markets and as a means of accumulating wealth. As a result, she says, homes are often left empty – even in areas where housing is scarce.

A significant portion of investor-owned homes are simply left empty. In Melbourne, Australia, for example, 82,000 (or one fifth) of investor-owned units are unoccupied. In prime locations for wealthy foreign investors, such as the affluent boroughs of Chelsea and Kensington in the city of London, the number of vacant units increased by 40% between 2013 and 2014.

In such markets, the value of housing is no longer based on its social use. Properties are equally valuable regardless of whether they are vacant or occupied, so there is no pressure to ensure properties are lived in. They are built with the intention of lying empty and accumulating value, while at the same time, homelessness remains a persistent problem.

Fuelling social and racial inequality

Farha’s report says escalating house prices have become key factors in the increase in wealth inequality. Those who own property in prime urban locations have become richer, while lower-income households become poorer.

Sound familiar? Below I’m going to reproduce in full (minor date edits) a post from last year:

In June 2015 this “ONE News investigation” caused quite a stir:

‘Ghost houses’ hit Auckland renting market

Ghost houses aren’t haunted, but could prove to be the stuff of nightmares for would-be renters in Auckland’s overheating housing market.

A ONE News investigation has revealed houses across our largest city are being bought and deliberately left empty by investors who refuse to rent them out, instead looking to sell them for huge profits without the hassle of finding tenants in the interim.

Building and Housing Minister Nick Smith doesn’t think the number of ghost houses is rising, and there is no way of knowing how many of Auckland’s 22,000 unoccupied properties are being deliberately left empty [my emphasis].

However census figures show the percentage of unoccupied dwellings in some desirable Auckland suburbs has surged in the past 10 years, with more than one in 10 Takapuna homes empty. …

In 2016::

Rise of the ghost homes – More than 33,000 Auckland dwellings officially classified empty

More than 33,000 Auckland dwellings are officially classified empty as the city grapples with a crisis of affordable housing and homelessness.

Auckland’s 6.6 per cent vacancy rate is higher than either Sydney (5.2 per cent) or Melbourne (4.8 per cent), where there has been an uproar over “ghost houses” deliberately left empty by speculators trading on a soaring market. …

I don’t know whether the methods used to calculate the 2015 figure (22,000 unoccupied properties) and the 2016 figure (33,000 officially classified as empty) are directly comparable, but on the face of it that looks like a 50% increase in one year. At the very least I think it’s safe to say that the problem is getting worse, not better (and that Nick Smith, as usual, is utterly wrong).

Labour’s Housing spokesman Phil Twyford said it was not surprising that the super-rich were happy to leave houses empty when Auckland prices were rising so fast.

“It’s madness, and says a lot about the housing crisis, that we’ve got thousands of homes deliberately left vacant by their owners while in South Auckland there are kids sleeping under bushes.”

He said Labour would crack down on property speculators, starting with a ban on non-resident foreigners buying existing homes.

So, while homeless Auckland families sleep in garages, cars and marae (donate here), tens of thousands of houses are sitting empty. Tens. Of. Thousands. As well as homelessness we have overcrowding and its related health problems; we have people unable to escape cold damp houses; we have rents that are too high; we have desperation further inflating the property bubble. All this in the service of (untaxed) speculative gain.

Behold the awesome efficiency of the market! Tremble at its rational distribution of resources! See that? It’s the invisible hand giving we the people the invisible finger…

82 comments on “The social damage wrought by homes as commoditites”

  1. One Anonymous Bloke 1

    The sooner squatters’ rights are enshrined in law the better. Also, have WINZ issue crowbars to the homeless.

    • weka 1.1

      Start with the empty state houses, including the ones National are apparently too useless to know how to repair to liveable standard. I bet there are plenty of people in the community that would get stuck in and sort them out very quickly.

      • Antoine 1.1.1

        You’re joking right?

        Either that or you haven’t thought this through

        (Bearing in mind that some of these houses will contain H&S hazards)

        • weka 1.1.1.1

          People in the community fix up houses all the time, and know how to do it safely and within the rules of the building code etc.

          And there are people who know how to assess risk. I’d guess that many of the houses are easy fixes, e.g. there was one last year that just needed a new oven. National are taking the piss.

          What sort of hazards did you have in mind?

          • Antoine 1.1.1.1.1

            Meth and asbestos for a start.

            What exactly are you suggesting? Open the doors of unoccupied state houses and say ‘hey, anyone who wants to live here can go for it, feel free to do renovations if you want’?

            A.

            • weka 1.1.1.1.1.1

              No, I’m suggesting that if there are literal homeless people in a community that it’s entirely reasonable for that community to take over local empty state houses that the govt is too incompetent or ideologically compromised to make available. And if that means breaking locks and squatting, go for it. I don’t think a homeless family should do this on their own, because of the risk to them, but if they have support, it seems a viable option. I’d support it if it was happening in my community. These are our houses after all, they’re not commodities, and the govt needs reminding of that.

              “Meth and asbestos for a start.”

              How is that any different a risk assessment for someone who has bought a house? Or is renting a house and doing renovations?

              • Antoine

                > I’m suggesting that if there are literal homeless people in a community that it’s entirely reasonable for that community to take over local empty state houses that the govt is too incompetent or ideologically compromised to make available. And if that means breaking locks and squatting, go for it. I don’t think a homeless family should do this on their own, because of the risk to them, but if they have support, it seems a viable option. I’d support it if it was happening in my community.

                Well it seems like a terrible idea to me but I can’t see us seeing eye to eye on this so I’ll leave it at that.

                A.

            • Psycho Milt 1.1.1.1.1.2

              Meth and asbestos for a start.

              Meth “contamination” is a scam. Any HNZ properties sitting empty for “contamination” that weren’t used as meth labs are empty because the National Party prefers scammers who donate to them over homeless people who don’t.

              • Antoine

                Right, I’m with you on that, but what about properties that _were_ used as actual meth labs? Do we want squatters in there? Can the prospective squatter tell the difference, as he stands outside clutching his WINZ issued crowbar?

                A.

                • Antoine

                  (Of course, one of the many reasons not to support squatting is that it can provide an opportunity to manufacture P)

                  • One Anonymous Bloke

                    I wouldn’t expect you to support it. In fact I’d expect you to whinge and wail and be very upset, which is yet another reason why it’s such a good idea.

                    Weka is right: put the means to a solution in the hands of the community, rather than Tory scum. Watch the problem disappear. Hear the whinging and wailing of the scum. What’s not to like?

                    • Antoine

                      Except the problem will not disappear, rather HNZ will get the squatters evicted and the problem will continue.

                      A.

                    • One Anonymous Bloke

                      What part of put the means to a solution in the hands of the community do you need to have explained to you in small words?

                    • weka

                      It’s election year. You really think the govt is going to evict homeless families that have the backing of the community from HNZ houses that have stood empty for months and there’s bugger all wrong with them? Actually, that’s another good reason to do it, bring down the govt.

                    • Antoine

                      > You really think the govt is going to evict homeless families that have the backing of the community from HNZ houses that have stood empty for months and there’s bugger all wrong with them?

                      In my view, totally. Evict, prosecute, and be delighted to have an opportunity to position as ‘getting tough on crime’ during an election year.

                      A.

                • weka

                  “Right, I’m with you on that, but what about properties that _were_ used as actual meth labs? Do we want squatters in there? Can the prospective squatter tell the difference, as he stands outside clutching his WINZ issued crowbar?”

                  I’ll ask you again, why is this more of a risk than someone renting or buying a house? And bear in mind that the proposal was for skilled groups of people to do this.

                  • Antoine

                    To name but two reasons:
                    (a) they wouldn’t be aware of the hazards when they entered the house
                    (b) they wouldn’t possess suitable protective clothing.

                    A.

                  • weka

                    Sure, but how is that any different for someone renting or buying a house?

                    I’m pretty sure that even you can figure out that if it was a known P house, and that that actually meant contamination, then it wouldn’t be a house chosen to take over.

                    • Antoine

                      The “even you” bit was unnecessary Weka, I like you and there is no need to be rude to me,

                      I concede that if your ‘community’ activists were wise and skillful enough to choose the right house, enter it safely, carefully renovate it and prepare it for occupation, and hand it over to the deserving occupier, then there would be no risk.

                      However,
                      (a) it sounds like a long shot to me, and
                      (b) I still reckon they’d get trespassed and evicted by HNZ before long anyway.

                      A.

                    • weka

                      I have asked you multiple times, hence the rudeness. Let me try one last time.

                      There is a street with 5 houses in it. One is HNZ, two are rentals, and two are for private sale. All of them have had P labs in them at some point. What is the difference between a group of people renting one of the rentals, buying one of the private sales, or taking over the HNZ one?

                      You seem to be saying that there is some particular risk associated with the community taking over the HNZ house. I’m asking you why that would be any different than them taking over any of the other houses. You haven’t answered that yet, despite me having asked many times.

                    • Antoine

                      > What is the difference between a group of people renting one of the rentals, buying one of the private sales, or taking over the HNZ one?

                      I answered that. The difference is that the renters or buyers hopefully either are advised, or find out on their own initiative, that there is contamination on the premises. Then they hire a specialised decontamination firm which deals with it. The occupiers, however (in my scenario) do not realise that the contamination is present. Or if they do realise, they do not have decontamination expertise and the relevant equipment.

                      In your scenario, the occupiers don’t choose the contaminated house (because they somehow know it is contaminated). Or perhaps, if they do, they have the knowledge and equipment to decontaminate it. (Perhaps one of them is a retiree from a decontamination firm and took his equipment home when he quit?) I agreed above that in this scenario they are safe, but expressed the view that it is an improbable scenario.

                      > You seem to be saying that there is some particular risk associated with the community taking over the HNZ house. I’m asking you why that would be any different than them taking over any of the other houses.

                      That is actually a different question.

                      I don’t see a health risk associated with taking over the HNZ house, compared to taking over an (equally contaminated) non-HNZ house.

                      I am however a bit concerned that you talk in such a blase manner about taking over homes that belong to other people.

                      A.

                    • One Anonymous Bloke

                      Having a blasé manner about the situation homeless people and renters find themselves in might make your property rights less secure.

                      Diddums. Perhaps you should have given a shit about it when someone else was on the receiving end.

                    • weka

                      “I am however a bit concerned that you talk in such a blase manner about taking over homes that belong to other people.”

                      I’m not. I’m talking about empty HNZ houses that National are too greedy/incompetent to make available to the people who should have them.

                      But thanks for finally being clear what your problem is with my proposal.

                      Just to clarify re the P thing. If the house is a known ex-P Lab my guess is that most people won’t touch it until someone else sorts it out (existing owner most likely). By most people I mean people who want to rent a house, people who want to buy a house, or people who want to take over an HNZ house on behalf of the community.

                      If the house isn’t known to be an ex-P lab then there is no difference between the renter, the buyer and the people taking over in terms of risk, as none of those people are going to know whether the house is contaminated or not (and tbh, it’s not the thing that most people are thinking when looking at a house).

                      Further, as has been pointed out elsewhere, the testing to determine whether any given house has P contamination or not is hugely problematic. So just because a house tests positive, doesn’t mean it’s actually a problem. And again, in my scenario, the group taking over an HNZ would think that shit through and make decisions on it just like they would if there were rotten floor boards or dodgy piles. But as pointed out, there are also empty houses that are empty because they don’t have a working oven in them.

                      You seem to be assuming that a group of people taking over an HNZ house would be unskilled. I’m suggesting they wouldn’t be, and in the case of P wouldn’t be any less skilled than the general public who take on houses all the time.

                      Hence your whole argument about the dangers of P-labs and HNZ houses makes almost zero sense.

                    • Antoine

                      Oh well, go for it then, I’ll be interested to see how you get on

                      A.

            • reason 1.1.1.1.1.3

              Antoine , I’ve posted before on Nationals meth Con,….last time at ‘The Dimpost’ ….

              to save you the embarrassment of thinking a big pile of bullshit is an election asset for boxer Bill and the Nacts I’ll do it again.

              Nationals Fake meth contamination/ eviction campaign during a housing crisis …. with its associated multi Million scams from Real estate agents and the fraudulent clean up industry … that is the real crime. …

              Almost $30 million tax payer/Govt money alone.

              Some Numbers, facts and observations …. versus Paulas baby and Sabins shadow

              _________________________________________________________

              Desoxyn is a “Medication”, used to treat Attention Deficit Disorder with Hyperactivity:… “For treatment of children 6 years or older” *
              http://www.webmd.com/drugs/2/drug-9124/desoxyn-oral/details

              It is Methamphetamine … “The usual effective dose is 20 to 25 mg daily.” … Overdose :..”doses of “400 to 500 mg are not necessarily fatal.”

              A childs daily dose* of this ‘medicine’ at 25 mg …. is enough to provide 25000 positive tests .. and evictions for ‘meth contamination’ … with $5000 -$15,000 ‘decontamination’ costs extorted … at present .5 ug con level ( one two millionth of a gram ) per 100cmsq area

              At the overdose level which may not kill a child…..you get 500,000 failed tests.

              In the Dimpost thread a poster said the tenancy tribunal ordered clean up costs against a evicted tenant at a .2 ug level ….

              which would bump the Con numbers to over 1,000,000 contaminated tests … Do we even have that many houses ?

              A house ‘contaminated’ at that .2 ug level would be approximately 1,000,000 times safer than Hawkes Bay river water…

              It gets bloody hot there and its a crime the kids cant swim in a river

              Basically the houses are safe from nationals meth con ( don’t mention the lead though ) …….. and our rivers are contaminated with piss and shit…

              *This expert gives current knowledge on the ADHD epidemic … and sound prescription advice for parents of children … at 56.30- minutes https://www.youtube.com/watch?v=ohogzxiqqkM

  2. Carolyn_nth 2

    on TV1 this week used the consumer word with respect to housing. This indicates he sees housing as a marketable commodity.

    In the video, the PM said,

    The truth is the traditional state housing model has failed the country, and a whole lotta people, and that’s why we’re fixing it.

    The ultimate accountability is meeting the needs of the consumers.

    And such an attitude opens the way for housing to be used by speculators and investors for profiteering.

    Houses and apartments should be safe secure living spaces for people.

    • Draco T Bastard 2.1

      Blinglish and National laying on the spin again.

      The truth, the real truth, is that the market that they worship is what has failed us. It has done so for thousands of years.

      The greedy rentier class is destroying society yet again. This is why usury is banned by the worlds major religions – it’s a lesson we learned a very long time ago. Even Adam Smith and other classical economists realised that rentiers are a major problem but didn’t have a solution for them as they promoted the very ideals that would bring them about.

      Capitalism = usury

    • millsy 2.2

      Not too sure how putting a stable roof over people’s heads has failed them.

      I honestly do not see the problem with people being in state housing for 30-40 years. Its called having a stable existence.

      I dont see how forcing people to live in boarding houses/shit holes and making them pay 70%-80% of their income in rent is good for anyone. It is just a drain on the economy IMO.

  3. saveNZ 3

    Sounds like now schools are just investment commodities now too in the US. Scary stuff. Who needs education when everyone’s a share trader!!!

    “A California high school has made millions of dollars from the initial public offering of shares in Snap Inc., the company behind the Snapchat photo messaging application.

    Simon Chiu, the president of Saint Francis high school in Mountainview, said the school board agreed to invest $15,000 in seed money in Snap in 2012, when the company was just getting started.

    They had been invited to do so by one of the student’s parents, who was a venture capital investor.”

  4. saveNZ 4

    To change this we need a major change away from neoliberalism, stupid economic policy and non citizens buying property as investments. We need to remove government organisation speculating with public money which is taking away from their original charter and adding ability to bankrupt themselves while fleecing the public of money through rates or taxes.

    Both Auckland and Wellington council seem to be guilty of this with Westgate mall and Singapore airline corporate welfare. Obviously government cases too numerous to list, – investment in the ‘Hillary’ foundation comes to mind. Essentially instead of investing in NZ politicians have become accustomed to frittering public money away and buying dubious political connections. You should not need to ‘pay’ your overseas friends to keep them as ‘friends’.

    For the locals we need to have alternatives to property as an investment. We need to have bank deposits guaranteed. (Pretty sure this is a Green policy), a diversified economy where people are prepared to invest in Kiwi businesses, more trustworthy government (at present most people are not thinking that superannuation is going to be around in their retirement), state houses for vulnerable people, council houses being bought back for vulnerable people, an immigration policy that works for the public and environment (44,000 new cars on the road in Auckland alone last year) for the right reasons, for Kiwi benefit, not just to allow certain industries to profit while out pricing locals from their own homes and businesses.

    In addition even Labour’s housing policy of adding an extra 100,000 new houses over 10 years will do nothing if immigration is allowed to go unchecked as 144,000 people settled in Auckland in the last 3 years so even with Labour’s their best efforts it will do little to stop the shortage and it will actually increase. That is not even looking at the rest of NZ. Demand side must be stopped because the supply side estimations are still well short of demand. And even if it was there are other considerations like infrastructure to look at.

    We also need to have wages in line with the cost of living in the country.

    I think a UBI could solve a lot of problems – because jobs are going and NZ does not seem to be able to move to the new economy – actually making it worse through their migration policies.

    They could be using migration to get green and tech skills in or investors in those areas for local companies, and diversify away from agriculture and construction. Instead they seem to be selling off NZ agriculture offshore, getting offshore investors as property owners and developers as a way to get citizenship in the investment category and actually make the housing crisis a lot worse!

    • Draco T Bastard 4.1

      For the locals we need to have alternatives to property as an investment.

      Or perhaps we need to realise that the economy costs and that there is never any profit.

      We need to have bank deposits guaranteed.

      Definitely not. That’s a large reason as to why the world financial system crashed in 2008.

      a diversified economy where people are prepared to invest in Kiwi businesses

      How about a diversified economy brought about by kiwis investing in kiwi business via the government’s ability to create money?

      state houses for vulnerable people,

      State houses for everyone who wants one.

    • Red Hand 4.2

      “For locals we need to have alternatives to, property as an investment”.

      NZX companies are an alternative and include Kiwi business success stories like Pacific Edge Biotechnology, Mainfreight and Xero.

      I don’t have data on this but anecdotally investors prefer what they see as the security of an investment property and they also believe the NZX is poorly regulated.

      What I don’t get is why they would not put money long term into companies doing something useful for people. Like cancer detection systems, small business friendly accounting software and transport systems.

      Companies that employ local labour and brain power, provide a service to NZers and overseas people, pay tax in NZ and are good employers.

  5. Siobhan 5

    The sooner Labour get into power and deal with the dreaded ‘foreign investors’ the better.

    THEN we can get on with having a good look in the mirror at our own housing as commodity addiction.

    Not to mention our own rabid compulsion to become landlords, exploiting others misfortunes and controlling other peoples lives.

    • Draco T Bastard 5.1

      The sooner Labour get into power and deal with the dreaded ‘foreign investors’ the better.

      But they won’t. Or, to be more precise, they’ll do something half-hearted that will look like they’re doing something but keep the problem in place.

      • Siobhan 5.1.1

        Well DTB, that’s what I think too.
        But I’m just chomping at the bit for Labour to prove what a farce it all is (their so called ‘solutions’) so we can get some proper conversations about housing underway.

        • Sabine 5.1.1.1

          because National showing us what an utter farce their so called solutions is just standard common business sense? Yeah? Right? Tui?

          • Siobhan 5.1.1.1.1

            National are appalling.

            But what does that have to do with Labours refusal to acknowledge the problem of life time renters, raising families in rentals, and retiring while renting?
            How does that make $500.000 an affordable house? (yeah right.)
            Why are Labour only looking at a fix for the very bottom fraction of renters? Because Homelessness is the only down side and community cost of our renting system?…yeah right.

    • saveNZ 5.2

      The problem is, there is a shortage of landlords… apparently it’s shifted to Wellington with 40 people queuing for the same rental. Bill English thinks it’s a great sign….

      There is a shortage of rentals because we have more people.

      But still they want more, Wellington organisation’s are giving 100 free NZ holidays for a job interview for overseas IT people… then they think it’s a success when people are homeless and 40 people wanting the same house to rent.

      Meanwhile state houses sit empty.

      It was John Banks as the Auckland Mayor who sold off Auckland’s council houses.

  6. Antoine 6

    So you would expect there to be some empty houses at any given point in time, for legitimate reasons (renovating, searching for tenants, on sale, owners on a short vacation, owner deceased, etc).

    I appreciate there is more concern over houses that are long term vacant (your ‘ghost houses’).

    If you want to have a reasonable, balanced discussion about ‘ghost houses’, you need to acknowledge that bad tenants are a big part of the problem.

    An investor who plans to hold a house for a period of time before flicking it could make tens of thousands of dollars a year by renting it (very easily, if they used a property manager). These kind of people don’t get to where they are by letting that kind of money slip through their fingers. So why not rent the house out? Simple, because of the risk that tenants will damage the house and it will be impossible to get recompense from them.

    Bad tenants spoil things for good tenants.

    A.

    • millsy 6.1

      I’m over people like you blaming the tenants for everything.

      • Antoine 6.1.1

        I hear ya but that doesn’t make it not true

        A.

        • Sabine 6.1.1.1

          bad landlord spoil things for landlords?

          oh, hang on, there is no such thing as a bad landlord ey, must be the bad tenants problem.

          • Antoine 6.1.1.1.1

            There are both!

            A.

            • One Anonymous Bloke 6.1.1.1.1.1

              The number of bad tenants is directly related to Tory scum making government policy. I say give the renters the power to deal to the problem of Tory scum directly, with squatters rights and crowbars.

    • weka 6.2

      “you need to acknowledge that bad tenants are a big part of the problem.”

      Do you have any evidence that bad tenants are a big part of the problem outlined in the post? Your statement is very bold. Given that housing has been written about so much in the past year or so you should be able to back up your claim. Unless you just made it up of course.

      • Antoine 6.2.1

        Just to be clear, you’re asking me to provide evidence that in a substantial proportion of cases where Auckland houses are left vacant in the medium term by speculators, a key reason for this is that the speculator fears that a tenant might damage their property?

        (I want to know what it will take to not get me banned again)

        A.

        • weka 6.2.1.1

          No, I’m asking you to provide some evidence that ‘bad tenants’ (your term) are a big part of the problem. Wear and tear is a normal part of running a rental house, and may well be having an impact on decisions re ghost housing, but that’s not the same as ‘bad tenants’, not even close.

          • Antoine 6.2.1.1.1

            I’m not talking about ‘wear and tear’, I’m talking about major expensive damage to the house, along with substantial unpaid rent.

            Here’s a scattering of relevant links collected quickly:
            http://www.stuff.co.nz/business/83991645/landlords-concerned-about-tenancy-tribunal-precedent
            http://www.stuff.co.nz/national/crime/89914223/bookabach-holiday-leads-to-meth-lab-fire
            http://www.stuff.co.nz/business/property/86475951/Tenants-abandon-property-leaving-huge-piles-of-rubbish
            http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11270155
            http://www.apia.org.nz/apia-blog/holler-v-osaki-and-how-it-will-affect-landlords

            I could go on, these are not isolated cases.

            If your instinct is to disagree with me, then I suggest you pause and try to think of an alternative reason why property investors would choose to forego tens of thousands of dollars of income per house per year.

            A.

            • Antoine 6.2.1.1.1.1

              By the way, this is interesting reading on whether Auckland actually has more than its share of ‘ghost houses’:

              http://transportblog.co.nz/2016/06/13/are-vacant-homes-adding-to-the-housing-shortage-in-our-leafy-suburbs/

              It’s on transportblog which I think is generally very credible and reasoned.

              A.

            • weka 6.2.1.1.1.2

              Your links show that are there bad tenants around. That’s not in dispute. I”m asking for some evidence that bad tenants are a big part of the rationale for ghost housing in places like Auckland.

              “If your instinct is to disagree with me, then I suggest you pause and try to think of an alternative reason why property investors would choose to forego tens of thousands of dollars of income per house per year.”

              It’s easier to sell a house without a tenant in it. Being a landlord comes with responsibilities and is actual work e.g. organising insurance, paying tax, property inspections, property maintenance, dealing with Tenancy Services etc. And yes, wear and tear. I can see if someone wanted to make easy money they’d choose not to rent, because being a landlord is an actual job.

              • Antoine

                > I”m asking for some evidence that bad tenants are a big part of the rationale for ghost housing in places like Auckland.

                Anecdotal evidence + logical reasoning OK, or you want actual bulk numerical data?

                > It’s easier to sell a house without a tenant in it.

                Not a good enough reason IMO. The investor could get a tenant in for a fixed term and, at the end of the term, either move the tenant on and sell, or keep the place tenanted.

                > Being a landlord comes with responsibilities and is actual work e.g. organising insurance, paying tax, property inspections, property maintenance, dealing with Tenancy Services etc.

                Very little work if you use a property manager and an accountant – unless there is major drama e.g. your house is on the front page of the paper as a meth lab. Not enough work to put most investors off IMO.

                A.

                • solkta

                  Speculators need to be able to sell a house quickly when they think they can get the best return not have to sell it at a specific time when a fixed term rental agreement runs out.

                  • Antoine

                    I don’t think that’s how the housing market works. It’s not, like ‘quick darling! houses are up 20% today! we must sell!’. It’s a more slow burning process.

                    (Especially for those who want to hang on to a place for just over 2 years to try to avoid paying tax on the capital gain… Now I am speculating however as I do not know how common or successful this practice is.)

                    A.

                  • weka

                    Yep. And there is more time involved than just the end of the agreement. You need time to make sure the property is clean and tidy, maybe work needs to be done etc.

                • weka

                  “Anecdotal evidence + logical reasoning OK, or you want actual bulk numerical data?”

                  Anecdotal evidence would be a start, but acknowledging that you just made it up would be ok too.

                  “>It’s easier to sell a house without a tenant in it.

                  Not a good enough reason IMO. The investor could get a tenant in for a fixed term and, at the end of the term, either move the tenant on and sell, or keep the place tenanted.”

                  Sure, but if someone wants to keep their options open that’s a pain, and in the context of the other things I mentioned for some it’s going to be part of the picture. O

                  > Being a landlord comes with responsibilities and is actual work e.g. organising insurance, paying tax, property inspections, property maintenance, dealing with Tenancy Services etc.

                  Very little work if you use a property manager and an accountant – unless there is major drama e.g. your house is on the front page of the paper as a meth lab. Not enough work to put most investors off IMO.

                  Right, but if you are someone who bought another house to move into and are wondering what to do with the first one, then all those landlord things are work, including getting them set up, if you have never done that before. And now those thousands you are talking about are being eaten into by the costs. I’m not saying it’s not doable, I’m saying I can see why many people wouldn’t bother because it’s easier not to. Especially if you don’t know how long you are keeping the property for. Might be a year or it might be a couple of months. Why would you do all that set up work for that?

                  People in Auckland are literally being professionally advised to not rent but to leave the property empty and accrue the interest. I’m guessing my list of reasons is a big part of that.

            • Sabine 6.2.1.1.1.3

              mate some of these major danger damage houses are on the market touted as executive rentals for several hundred of dollars.

            • solkta 6.2.1.1.1.4

              Being able to offer immediate and vacant possession makes a house a lot easier to sell. Not having the house clogged up by tenants ugly furniture and junk makes the property much more presentable. Not having to give reasonable notice to tenants to have people view the property and being able to do unhindered open homes makes marketing much easier. I would have thought all this was obvious.

              • Antoine

                Yeah I understand this, but if you’re going to deliberately hold the place while the market rises, then you might as well keep it tenanted UNTIL such time as you decide you want to sell. Then by all means, have it untenanted during the sale process.

                A.

                • weka

                  That is all work though. Not everyone wants to do that work.

                  • Antoine

                    That’s what property managers are for. I think you overstate the amount of effort involved (not being a landlord yourself?)

                    Unless, as I say, the place gets trashed in which case it becomes rather a lot of work!!

                    A.

                    • weka

                      I’ve explained my reasoning elsewhere in the thread, and all you’ve done is assert that it’s not work. Even hiring a good property manager is work.

                • solkta

                  Well that would all depend on how long you think you might need to hold it. In Auckland houses sometimes sell several times in a year.

                  • Antoine

                    Sure, so if you envisaged flipping the place in weeks to months, you would probably want to keep it untenanted for convenience reasons as you set out. I was talking about the cases where the investor plans to hold for a longer term.

                    A.

          • jcuknz 6.2.1.1.2

            Forget ‘bad tenants for a moment and I am sure there are a few spoiling it for every would be be good tenant.
            But normal wear and tear … if there is a shortage of builders then it must follow there is a shortage of repairmen making it hard to even get repairs done so why bother when standing empty the value of the place is going up as almost everybody [ not me for sure when I was in a position to get into property, I have my home and I am content with that ] is racing to buy and forcing the prices higher and higher.

    • …you need to acknowledge that bad tenants are a big part of the problem.

      A small part at most. We have a situation where house prices are rising rapidly and an increasing number of people buying them are leaving them empty. Is that increase likely to be down to an inexplicably-increasing number of bad tenants, or the simple fact that the rising prices mean houses are now making capital gain so fast that tenants are superfluous? It isn’t difficult to figure out which it is, if you’re not being disingenuous.

      • Antoine 6.3.1

        > an increasing number of people buying them are leaving them empty

        Evidence on the ‘increasing number’ bit?

        (Or are you relying on the original post, which contrasts 2015 and 2016 estimates produced in different ways and finds the latter is more than the former?)

        Also note that while the number of bad tenants may not be increasing, the remedies to tenant caused problems seem to be reducing – see recent controversial Tenancy Tribunal cases…

        A.

        • One Anonymous Bloke 6.3.1.1

          Tory scum cause the problem of increasing inequality, which in turns flows into all sorts of social issues including difficulties with tenants.

          Tory scum refuse any personal responsibility for this, so bad tenants are the least they deserve. It’s that simple.

        • Psycho Milt 6.3.1.2

          Evidence? Well, we have the UN report that finds numbers of unoccupied investment properties increase when demand is causing prices to increase, and we have the news stories quoted in the OP, which might be produced in different ways but show exactly what the UN report says we should expect to see. And we have straightforward logic, which tells us that if our investment property is making $1000 a week sitting empty, renting it out is more trouble than it’s worth.

          But sure, maybe it’s just bad tenants. If only we had a body that could gather evidence to establish the facts and do something evidence-based to fix the problems. We could call it a government – if only we had one of those…

        • jcuknz 6.3.1.3

          One of my reasons for sitting pat was the wide spread tales of Bad tenants’, nothing recent, been going on for years and a lack of confidence that I could spot then before renting out. Not worth the gamble .. but then I very rarely ‘invest’ in Lotto … mugs game born out of desperation …. but my wife never passes a shop without getting a ‘scratchie’ at least. 🙂 Though I know some enjoy a gamble … the reason my Mother separated from my step-father, she organised a set price for the flowers they grew … he prefered the gamble at the market 🙂

          As for ‘tory scum’ … people using that expression need to get a life.

  7. Tamati Tautuhi 7

    A lot of silent Asian money being parked in NZ real estate, NZ is seen as a safe haven for offshore investors.

  8. Skeptic 8

    The short answer to NZ housing problem is basically enshrined in NZ Law – Convention the third arm of NZ Legal System (the others being Statutory Law and Stare Decisis – Judge made Law). Nz signed up as one of the 1st signatories to the UN and the UDHR. It’s there in black and white – housing is a right – not a privilege – a right. Part of the reason for NZ expectations about housing is that we learned well the lesson of the Spanish influenza epidemic of 1919 – poor and insufficient housing being one of the chief contributors to that epidemic’s spread. Our State Housing and subsequent building programs are a direct result of Government decisions to avoid any repetition in the future. Except for this one – somehow “market forces” causes historical memory lapses – like some type of political Alzheimer’s Disease – endemic throughout this particular National Government.
    So what to do? Revamp the HCNZ to what it was when NZ was able to plan its way out of such crises – yes. Institute a CG Tax – yes. But more radically, I recommend that Local Bodies be charged with ensuring all housing in their responsibility be occupied, to the extent that they be empowered to confiscate without compensation any and all dwellings that are unoccupied without good and sufficient reason.
    Boy, would that upset a few scumbags!

    • jcuknz 8.1

      “confiscate without compensation…”

      Something like what the TBs are suggesting to get tax out of big offshore company’s NZ business …. draconian but no comments to this in TS yet?

      • One Anonymous Bloke 8.1.1

        It’s certainly an alternative to crowbars and squatters’ rights. Bear in mind that the day the law passes is the day lots of houses suddenly appear on the rental market.

        I’d like to see people in the dock for human rights violations too, but the first priority is to get everyone properly housed.

        As for emotive terms like “scum”, when Tories stop talking about bludgers and smearing people with drug accusations, and take some personal responsibility for the massive failure of everything they do, and the harms they cause, perhaps they won’t earn such massive amounts of contempt.

        • jcuknz 8.1.1.1

          Two wrongs make a right … right.

          • One Anonymous Bloke 8.1.1.1.1

            Contemptuous language is a good way to call attention to contemptible behaviour. Homelessness and rheumatic fever may break my bones but words will never hurt me.

  9. saveNZ 9

    In my view these are some reasons for the ‘ghost’ houses.

    Investors coming into NZ do not rent property out. For example in China they do not rent houses out. They buy them and leave them empty. Relatives many use them or when they are in the country.

    Damage – There is now ability to damage a house substantially by P contamination. So there is a real risk for anyone renting out a house now that previously was limited to easier damage to repair. The landlord is also liable for any ‘P’ harm to new tenants under these circumstances.

    Unpaid rent – houses are now so expensive the rents need to be high. Many people can’t pay it and fall into arrears.

    Transport costs and times and affordability issues – it is now so hard to get from A to B that people are having two houses – one small apartment style close to their work and then their further out place that is the family home. AKA someone who lives in Waiheke might have an apartment in the CBD so they have somewhere to stay and can cut down on transport costs.

    Flexibility – People now can work from anywhere and expected to go anywhere for work, leading to the living and working in multiple locations.

    Divorce/death – people get divorced so they have to separate and place empty while being sorted out. We have an ageing population. It can take years to settle disputes.

    Leaky buildings – many buildings are empty waiting for repairs – landlords are liable if the tenants become injured by mould etc.

    Renovations and demolitions – as the renovation craze continues and being made much easier with the unitary plan scam. Houses are being made bigger, more opulent and with as many luxury items as possible. While they are being renovated they are empty and the occupants must rent or buy themselves due to the 1 -3 years it takes to build/rebuild some of these houses.

    New standards – Landlords are not allowed to rent old damp villas and bungalows anymore that previous generations all grew up in, therefore they will remain empty until they are renovated or sold.

Recent Comments

Recent Posts

  • Swiss tax agreement tightens net
    Opportunities to dodge tax are shrinking with the completion of a new tax agreement with Switzerland, Revenue Minister Stuart Nash announced today. Mr Nash and the Swiss Ambassador David Vogelsanger have today signed documents to update the double tax agreement (DTA). The previous DTA was signed in 1980. “Double tax ...
    3 weeks ago