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Where have all the houses gone?

Written By: - Date published: 7:10 am, January 20th, 2015 - 131 comments
Categories: cost of living, Economy, Environment, housing, local government, national/act government, public transport, transport, vision - Tags:

Yesterday it was announced that Auckland is the ninth least affordable city in the world in relation to wages versus house prices. An Aucklander requires 8.3 times their wage to buy a home.

Len Brown criticised the report noting:

Auckland Council had worked closely with central government to put in place the framework and remove “red tape”, making it easier for Aucklanders to build houses.

In 2013 the Government entered an accord with Auckland City to build 39,000 houses by 2016. Not 40,000, but 39000 which suggests it was a figure thought about, not just plucked from thin air.

Anyone who has tried to build a new home understands they must go through the Resource Consent and Building Consent application processes and this takes time.

Of the 39,000 houses due by September 2016, 350 have been completed but only 20 of them are as a result of the accord.

In fact it appears the scheme agreed to have 39,000 consented by 2016 which is not the same as built by any stretch.

This impacts renters as well. Over the last few months rents have been going up an average of $20 a week. Rent in Auckland, is like the petrol component in goods and services, they tend to only go up…  until supply outstrips demand, or the worldwide economy collapses again and people are forced to sell their homes to divest themselves of their mortgages.  Auckland is a LONG way from the former.

When the Auckland Unitary Plan was announced, it included introducing low rise to the leafy suburbs of Central Auckland… I made a submission in favour. I was in the minority. The outcry from the Epsom’s and Mt Eden’s of Auckland was cacophonous. Not In My Backyard (NIMBY)

On Dominion Road ( a main suburban arterial road into the City Centre) some apartments have started to go up. It is a mixed development of commercial at ground floor and a couple of floors above of apartments. They sit on the edge of the road right by main bus routes. 1 bedroom is over $420,000.

I know someone who bought off the plans and the property has gone up in value by $40,000 in 4 months.

Personal Note

I have been house hunting in Auckland since October. I own a home in Central Auckland in one of the 31 suburbs with an average house price of $1m or more. 31 SUBURBS. This was “just” 13 in December 2012.

I am looking for a home further out of Auckland toward the South (of Auckland). There are so few homes on the market, supply is thin, and this is driving prices higher and higher.

In October 2014 we received an offer for 1.3m on our home. Due to the emergence of a defective title, that sale fell through. Since then Auckland City has valued out house at 1.38m and a repaired leaky home next door to ours which is comparable is now on the market for 1.5 to 1.6m. So apparently our home has risen in value by 120,000 in 3 months.

Around the corner some neighbours bought a 3/4 bedroom bungalow with a pool (fully renovated) for $1.7m five years ago. They broke the price ceiling in our area. They have lived in it. Not done it up, just enjoyed their beautiful home. Just before Christmas they sold it for $2.8m. Broke the ceiling price in this area again.

I have noticed that even in greater Auckland people have an expectation that their homes will achieve in excess of their CV’s (current valuations carried out by Council to set rates) notwithstanding the increased commuter factor.

At the first home buyers end (a misnomer if ever I heard one), my daughter in law has been trying to buy a 2 bedroom unit for 12 months with $500,000. She has failed abysmally. To achieve these prices she has to move to the outskirts which will increase their costs through travel and time. She is being beaten to the punch it seems, judging by the Open Homes and Auctions, by people wanting rental properties.

Anyone who knows Auckland knows it has grown without major planning over the last century and has spread out from the centre like a ripple in a pond. Geographically it is a large city. Houses grew, transport did not. ONE solution, resisted by so many Councils and Governments over the years is decent public transport. GET the people efficiently from the outskirts to their places of work. Create satellite towns so people are self sufficient in their neighbourhoods other than getting to their places of work.

Greed and self interest abound in Auckland’s housing market.

I am fortunate. I am NOT complaining about my situation. I am using my house hunting experience to springboard to how bad the accommodation problem is in Auckland.

The Accord, should it succeed in “consenting” the 38,980 homes by September 2016 is something… but in the meantime house prices go up, non house buyers pay big rental, the rich get incredibly richer and the young and poor cling on  by their fingernails. There will be no political will, particularly from the Right, to genuinely address this because a large part of their constituency (and a chunk of Labour’s too) are sitting in these houses rising in value and buying the rental investments. A Government that wants to build more houses BUT turns its back on public transport is not to be taken seriously.

foot note

YES people could leave Auckland to buy a cheaper home. BUT that ignores the reality for so many in Auckland that this is where the job, that keeps them hanging on, is situated. Like Auckland and Aucklanders or not, they make up 1.5 million of our fellow citizens (and Christchurch is heading the same way).

 

UPDATE

Olwyn has succinctly summarised the issue here

 

131 comments on “Where have all the houses gone?”

  1. The Fairy Godmother 1

    On another personal note very sad that some dear friends leaving for Australia both have jobs can’t afford a house.

    • tracey 1.1

      Sorry to hear that.

      Also, telling people to rent instead is a bit vacuous. Why? Because many want to move to home ownership precisely because the mortgage calculators suggest that buying will cost the same as their renting, and they get capital gain…

      cat chasing its tail.

  2. Ad 2

    Speaking of which, I spend two straight days with my 10 year old, nine year old and thirteen year old nephews in Wanaka playing Monopoly. Most of the lessons felt in Auckland now are getting to what it’s like when you have got the block and are putting hotels on it.

    I have several relatives with rentals, who have nasically set their kids up with the equity they now have.

    Suffice to say, everyone who is locked in, locks many others out.
    For generations to come.

    • tracey 2.1

      I also know a guy who advised his son in his first year at Dunedin University to take the full student loan and buy a house as an investment. Which he did. Dad is an accountant, self employed and frequently berates how much tax he has to pay and the lazy, bludgers he has to support through said taxes… The irony, apparently was lost on him. Same son who, according to my nephews (who are mates of his) made money through his university days selling drugs to other students.

      Sold the house after 3 years, pocketed the profit, paid back the interest free student loan… never completed his degree…

      Ethics it seems are also locked in.

      • Ad 2.1.1

        I’d humbly suggest: don’t sell, unless it greatly decreased your mortgage.
        Debt is my enemy. This feels like a bubble – some will come away free, many others devastated. It’s so 2006.

        The only businesses making real money in this economy are the banks.

        Personally I blame Rich Dad Poor Dad, as much as the government. There’s no point thinking about alternative careers or lives when the market drives you to financial freedom through so few means.

        • tracey 2.1.1.1

          you mean my personal situation? You have my dad in your camp… he keeps thinking of what this will be worth in 6 months… we would be mortgage free from this sale and subsequent purchase.

          • Molly 2.1.1.1.1

            I’m thinking Ad is referring to the philosophy behind the popular “Rich Dad, Poor Dad” financial book series, by Robert Kiyosaki.

            Contains such sage advice as: setting up a limited company allows you to walk away from your creditors and start again, most successful businessmen have failed at business at least 3 – 8 times, so that is a crucial part of your education. (Note: no mention of the effect of this ‘financial education’ on the other business that deal with your bad debts)

            How to avoid paying tax, and get debt-free loans from the US government etc. etc.

      • meconism 2.1.2

        tracey, can you put a date when that story happened because my undergraduate loan, just completed, and now my Masters degree fees, just beginning, are paid directly to Otago by Studylink. Loan money does not go anywhere near my account, never has and never will. So without a date as to when this occurred I politely and with all due respect call bullshit on this anecdote.

        • Murray Rawshark 2.1.2.1

          Nope. I got money straight into my account when I was at uni in the early 90s. It was for living expenses and at that stage probably would have been enough to put a deposit on a house in Dunedin.

        • Grant Buist 2.1.2.2

          “The loan system has been changed and modified significantly since its inception in 1992. Initially it provided bulk payments to students and charged lower than market interest rates from initial drawdown. This led some students to use this money for investment purposes, benefiting them but leading to a widespread perception of student excesses.” – Ye Olde Wikipedia

  3. Murray Simmonds 3

    Observation #1:
    Here are the numbers of properties listed on “Trade Me” both for sale and for rent this morning, 7.30am 20 January:

    Northland: 6117 for sale, none listed for rent.
    Auckland 7315 for sale, 3848 for rent.
    Waikato 5507 for sale, 893 for rent.
    Bay of Plenty: 3948 for sale, 413 for rent
    . . . . and so on down the list.

    Admittedly, some of them may be dual listings – i.e. the same property listed both for sale and as a rental.

    Observation #2:
    I don’t see evidence of tent cities popping up all over NZ as a consequence of the huge shortage of housing stock that we are told about. And yes, I understand that there are people living in garages and caravans and even in cars in many parts of the country.

    These observations seem to me to indicate that its not so much a shortage of housing, but rather a shortage of AFFORDABLE housing.

    So why do the Nats keep telling us that we need to build more houses? Why do they keep rattling on about the supply/demand problem and the problems created by the RMA and how these issues are slowing down the rate of new builds?

    The members of the Key Government clearly love things the way they are – the status quo – because their supporters are mainly property-owners who are seeing their assets increase in value at unprecedented rates under present conditions.

    I’m tempted to conclude therefore that Government policy is to simply keep raising the red herrings of supply/demand and the need to change the Resource Management Act for one good reason: They know that neither of these issues are relevant to the housing AFFORDABILITY crisis. But by by being seen to push these two issues, the public might be fooled into thinking that they are doing something about the problem.

    Its all about public perception.

    • Ad 3.1

      Apart from tent cities, what are your solutions for affordable housing?

    • tracey 3.2

      Unless you know how many people are seeking rental properties or to buy how can you make your conclusion without a rider?

      I DO agree that the RMA is, like employment, always a big pet project for the Right. And we are in for deregulation to make developers VERY happy and rich and there will be fallout in a few years as there always is. This government does nothing without a strategy designed to pull some wool over the eyes. As i wrote they have many reasons not to address Auckland’s problem, or Christchurch’s including their constituency making hay from it.

      The RMA is going to change sufficiently to allow the further unfettered random expansion of Auckland. Developers do not develop for love, they do it for profits. Hence the chances of them passing on their savings in reduced building consent fees is minimal. land bankers are very excited methinks.

      Why would tent cities rise up outside of Auckland or Christchurch?

    • This is because the rise in rental prices is not being caused by a shortage of rental accommodation. Future shortages of housing are being addressed – badly, in a hurried and politically stressful environment.

      If it were, we would see rental costs driving the rise in house prices. As it is the opposide it happening.

      • tracey 3.3.1

        Can you explain that to me again? Each time a flat goes up for rent, 100’s apply? I s that not indicative of a shortage?

        • Naturesong 3.3.1.1

          Yeah, I think my argument needs data.
          I’ll retract the assertion until I can show that recent rent inflation is not the driver of recent house price inflation irrespective of whether or not there are current rental shortages.

  4. Lindsey 4

    All the emphasis seems to be on the cost of housing. Nobody is mentioning the other side of the coin which is our low wage economy. We have had 6/7 years of almost stagnant wage growth for a large section of the working population. A lot of the push leading to higher prices is from overseas. On the North Shore – any property in the Residential 4A zone which has more than 800m2 of land will be of interest to the mostly Asian developers who will subdivide it and build either 1 or 2 new houses on the site. Consequently the prices go up with the competition.

    • saveNZ 4.1

      Great points.

      If they compared apples with apples, in most cities to get a 3 bedroom 2 bathroom detached double garaged house with front and back gardens will be a much greater cost than here. Of course MSM are far too lazy to attempt that. i.e. investigative journalism.

      The affordability is mostly due to low local wages and the preference of building of large expensive houses and huge council and infrastructure levies when you build.

  5. coaster 5

    I know its not ideal, but with your 1.3 mill you could buy a business and house in other parts of nz. Your daughter could work for you, buy a brand new house and have change left over from here 500k.

    the population/work is to dominated in auckland whilst regions have little or negative growth. The christchurch issue is a total different kettle of fish as im sure we all understand.

    • tracey 5.1

      I hear you.
      I would LOVE to move down country. Smaller house etc etc…

      The 1.3m is not net. My partner works for a charity here in Auckland, a job she loves. It’s not about the money that she does it. By selling, moving, losing the mortgage, she can keep working for them and I can make us more self sufficient at home. The d-in-l is working in event management and is happy there.

  6. Ad 6

    The most depressing thing is that the wholesale stripping of public sector housing agency – through the sell off of public rentals, lack of ambition for urban renewal, weak Tamaki Transformation Project, largely completed Hobsonville Project, full selloff of Council housing in Hamilton, etc etc.

    Even if the government changes in 2017, getting the public sector geared to make activist/interventionist change will take quite a bit of time because the gears have been stripped out of the system. Also the removal of the Urban Renewal part of the Public Works Act means its far harder to develop affordable housing in the form of apartments (because its brown fields).

    Even in 2017, we won’t have the power – at least for a while – to really change things.

  7. Woodburner 7

    Consider this – even if the 39,000 consented homes are built, it could actually exasperate the issue rather than solve it.

    Why? Currently, it is in the interest of a developer to build 4-5 bedroom, 150/200m2 homes. This is because that type of home gives the best return as the higher build cost is proportionate to the increased capital value compared to a 2-3 bed.

    Unfortunately, this doesn’t really match the profile of home demand. There is massive pressure on “starter homes” (2-3 bedrooms, up to $300k). Thats not what is being built.

    So, we end up with a bunch of 4-5 bedrooms mansions that are not really what is needed – Look at tauranga for an example, there are so many 600-700k homes on the market that have been listed for over 2 years. Theres no buyers for these homes, yet you cant buy a decent 3bed for love nor money. At some stage, you have to run out of buyers for these kinds of homes (auckland seems to be an exception here… for now)

    Forget building as a first home buyer, even if you could get the finance you would have to be mad to go down this path – the potential risks and uncertainties are way too high.

    To me, it seems like there is an issue of the wrong types of houses being built, because the market it not responding to demand properly. The market may self correct, but in doing so it is going to leave a lot of people heavily overcapitialised – again look at tauranga where there are a lot of older people with life savings locked up in 700k-1m levergaed properties that are struggling to sell for 650k…

    There are a lot of potential solutions around intervening in the planning phase to ensure the right kind of houses are being built, but that still doesn’t solve the secondary issue those “affordable homes” quickly becoming unaffordable the moment the first owner chooses to sell and take advantage of an overheated market… Seems there needs to be some form of overcorrection that has to occur?

    • Macro 7.1

      Totally agree. having worked in civil instruction in the Auckland area for a number of years only once did we work on a site that was for Housing Corp and every other development was to be at the middle – top end of the market, and the reasons you give are exactly the reasons why. Not enough in it for the developer, who are by and large skating on a thin wedge of profitability, things can go horribly wrong. This is why it really is the responsibility of Govt to be involved from the ground up so to speak.

  8. saveNZ 8

    In dirty politics type of way, the MSM and government message is to get rid of the RMA and to fast track through subdivisions and consents.

    However who does this benefit? The landowners and people sitting on greenfield land or land in the inner city which can be further subdivided for more houses and apartments or people who want to build a house that infringes on others rights. Therefore the rich landowners are getting richer while the poorer are not getting into a house as somehow the ‘affordable’ housing is not the goal, it is actually being used to make expensive spec houses and doing the opposite, making the previously family areas more expensive, especially in Auckland million dollar suburbs, soon to be multi million dollar suburbs.

    The assumption is that the land is the issue, has been carefully created by the powerful and their ‘focus’ groups but the real reason is far more varied and complicated.

    Building materials is virtually a monopoly. In spite of the leaky building fiasco no building company has ever been held to account as far as I am aware.

    Transport is a major issue, you can build further out, but it costs to drive in everyday.But no consideration is given to this. Current occupants of the city will now have to battle with the 1000’s of new drivers commuting in, everyday.

    For example in Westfield and Huapai huge development is planned. (Houses there are being marketed at $850k, hardly affordable). Auckland transport is spending millions on creating more lanes on the NorthWestern, but have not put in a dedicated bus lane. It is fairly obvious that you need public transport links in particular “park & ride” scenarios (which are hugely popular and over utilised in Albany for example). Nothing like this planned around the development areas. Public transport and affordability is not the goal.

    The crack down of builders have made them very unwilling to work on cheaper developments or renovations. They prefer the 4 bedroom 3 bathroom central city McMansions, money no object and less risk. There could have been an insurance scheme adopted by council (like earthquake commission levy) but no, just put the onus on the little guy.

    Got a leaky house, forget trying to get a quality builder to fix it. It costs you about 4 times as much as it should.

    Council fees are horrendous. Last year council increased their fees for resources consents by about 65% as far as I can make out in Auckland.

    Immigration is on the rise, and investing in property one of the ways to get citizenship!

    It is making the poor poorer as Kiwis are being forced out of their houses as land is subdivided around them and build up without looking at it’s effects on neighbours and amenity.

    How this is manifesting is that one neighbour wins by developing a large house out of height to boundary, taking views and sun, without having to do any expert work like structural engineering or geo tech reports or even use a qualified architect or traffic plans (if out of main centres). This is ‘fast tracked’ as supposedly it is ‘helping’ create more houses. However it is not only not affordable, it is driving the prices up in the area, taking away builders from cheaper projects and changing the culture of an area.

    The council do not seem to understand that you need to encourage smaller houses to make them more affordable and more sustainable to reduce living costs in them.

    Albany and the CBD Auckland good examples of how not to develop. Unfortunetely the council have not learnt from this, and repeating the same mistakes but in now beautiful areas. The idea is you can’t be bothered to check that a building is safe, well designed and works well in the area before you resource consent it. This is supposed to happen under the rules but in reality in Auckland the council planners never got the memo. There are going to be a lot of problems in 5 years similar to leaky building as well as aesthetic issues and transport issues but no one is thinking about that.

    Planners are salivating like Pavlovs Dogs in a frenzy of destruction to create the world’s most unlivable city in Auckland and probably Christchurch too.

    The ratepayers and taxpayer will pick up the bill as all the issues come to light which are supposed to be picked up in resource consent states but not being assessed properly in the frenzy.

    And the houses, well lets face it, even few current landowners will be able to afford Auckland, they will be tenants in their own cities.

    The writing is on the wall, 1% of landowners are soon to own 99% of the world’s resources and NZ is a total example of how that is working.

    • Olwyn 8.1

      The writing is on the wall, 1% of landowners are soon to own 99% of the world’s resources and NZ is a total example of how that is working.

      When I put Tracey’s post, your comment and Woodburner’s comment together, this is the picture that emerges: Inflated property prices benefit the very wealthy and the banking industry. They do not benefit the middle class, apart from giving them a warm glow. In fact they make it harder for them to move from one area to another without taking on scary amounts of debt. They also make it harder for them to help their kids get into homes as the risks escalate with the prices. The middle class however, would be harmed by property prices collapsing.

      The poor are harmed either way. They cannot even entertain owning, but neither can they afford the rents. And any oasis they find is likely to become the next target for gentrification. But if the market collapses, they will not benefit either. A lot of the economy will go down with it, with low-paying jobs the first to go.

      That is how Key continues to get voted in. Large sections of the middle class are scared not to vote for him, while the poor give up in despair. I think we need more state houses in the form of low-rise apartment blocks, with apartments large enough for families, and the opportunity to buy. Let the aeroplane game go on until new modes of investment are established, but allow people an alternative. Even New York has rent-control zones.

      • Murray Rawshark 8.1.1

        “Even New York has rent-control zones.”

        It’s amazing that the capital of Freemarketland can have that and we can’t. Maybe the American dream has never included feeling rich because your family home has gone up in monetary value? I know that developers like that guy with the strange hair make a mint, but I don’t think the average homeowner does. That seems to be something we’ve been sucked into downunder.

    • ghostwhowalksnz 8.2

      Auckland Transport doesnt build or pay for motorway expansion. Its all a central government issue

  9. Gosman 9

    Your issue is largely about supply. Increase the availability of land to build upon or allow greater use of existing land then housing will become more affordable. Of course to do that you need to speed up processes and allow greater intensification. Are you okay with that?

    • tracey 9.1

      Was that question to me?

      If it was I suggest you re-read what I wrote, you will find part of your answer there.

    • Molly 9.2

      Land release is only a very small part of the discussion.

      “Affordable housing” is not the same as “affordable development”.

      Residents have to live in those houses.

      The cost to the developer is only the start of the long-term cost of housing.

      For example:
      1. The cost to the council who has to ensure infrastructure development and maintenance ad infinitum (and does so using the rate base, especially now that National has limited the amount of development contributions that can be charged to developers),
      2. The cost to the primary production assets – developments being built on Class I soils (- as has been approved just out my window – land that since it was confiscated from the local iwi has been a food production unit.)
      3. The cost to the environment – lack of boundaries or restrictions for building and development for years has created an industry of builders, architects and planners that have not had to design or build to make the most out of available resources. We waste materials, and build without consideration for passive solar, material use or energy consumption. There are a number of Japanese architects on the other hand, who build in standard units (and use the whole sheet of plywood, etc) and create light-filled, high quality living spaces in very small spaces.
      4. The cost to the residents – if you live in a newly developed area, you will be driving your children to school, and using your car to travel to sports, to activities, doctors appointments, and shopping. The capital savings you make when purchasing (if the developer doesn’t just increase his profit margin) is offset when you add the commuting costs in time and money.
      5. Social fabric costs – when new developments exist in vast tracts – the lack of vital community spaces is apparent, and development attempts to do so – often remain empty for many years until some kind of long-term connection is built. That is also delayed if buyers are using the purchase as a stepping stone to bigger and better.
      6. The above all show a lack of preparation for the effects of climate change. So much for planning and long-term resilience.

      The issue is not just about supply. It is recognising that stable and affordable housing is a requirement of healthy NZers, families and communities.

      NZ housing investment opportunities for foreign ownership should be way down the list, if not eliminated completely.

      (Note: I am OK with intensification, because I realise how wasteful previous planning and building has been, but agree with Tracey that intensification can happen in Auckland in many different satellite areas.)

      • tracey 9.2.1

        Thanks for this Molly.

      • Lloyd 9.2.2

        Actually one of the problems for development is there are too many boundaries and limits on development. This is not a result of the RMA but a lack of guidance from successive post-RMA-introduction governments. If a developer could put as many apartments onto inner city lots that the market would buy, then there would be very little demand left to expand Auckland.
        Right-wing politicians argue two-faced that the problem of development is the RMA and at the same time complain when a council allows higher density development. If market forces alone were allowed we would get much higher development on all inner-city properties. This is the hypocrisy of the right. They say that market forces should prevail and that the market is much better at sorting out things than regulations, yet the first time any council suggests that density restrictions be eased it is a left-wing plot and/or it is evil planners. Regulations restricting development suddenly become the way to stop those evil left-wing planners from raising density. Funny, isn’t it?Regulations anywhere else are set up as being the root of all costs. If we let developers develop inner city areas without requirements for yards, parking spaces, maximum building coverage and height boundaries, the need for property for development at the edge of the cities (where transport costs are high) would be slashed.
        Government could introduce an NES for residential zoning very quickly that would in turn allow drastic changes to zoning rules very quickly, far better than blunt stuffing around with the RMA.
        The NES should contain minimum guidelines for livable maximum density inner-city development, which would allow clear rules for development in a specific zone throughout New Zealand, allowing developers to create designs which will meet the district plan rules nationwide – cutting costs.
        The environmental costs overall of high density inner-city living are much lower than low-density life-style development at the edge of a city. The residents of Singapore and Hong-Kong have a much lower environmental footprint than the average resident of Auckland.

    • ghostwhowalksnz 9.3

      You Ok with restrictions on non resident buying of land or houses ?

      • Gosman 9.3.1

        Not really. It has likely a minimal impact on the price of housing (although it would be interesting to see more research in to this) and restricting demand from this source can have the perverse effect of discouraging new builds and therefore reducing supply.

        • Skinny 9.3.1.1

          What tripe Gosman if it’s an issue of supply and demand, or should I say demand outstripping supply then National or any Government for that matter would immediately cut demand by cutting foreign access to buying in Auckland.

          The reason their not is political game playing, Aucklanders who own houses are very happy to see their investment increase substantially in value, who wouldn’t. The kickback is National gets the majority of votes.

    • vto 9.4

      bloody simpleton gosman.

      it is more about cartels in the building sector…
      councils putting taxes up…
      government putting GST up…
      foreigners increasing the demand side ridiculously…

      and very little to do with supply

      wtf would you know sitting on your arse in a wellington office?

      best thing that could be done is to ban foreign ownership of land, which brings no benefit to NZ. That would drop the demand side by 5-10% and anyone who knows anything knows that such a change in the demand side is very large and will have a significant effect.

      at the end of the day no NZ government will do anything to lower house prices because it will get voted out instantly, and it is this very fact that dooms us to our current situation.

      it is fucked

      • Gosman 9.4.1

        Do you have evidence that 5 to 10% of the demand for housing in NZ is from overseas?

        • vto 9.4.1.1

          yes

          indicative stats released in the media last year suggested 7% and that accords with that is seen on the ground. It is near identical to the amount of rural land owned by foreigners.

          don’t ask me to find/link the stats (no time) – instead deal with the point on the assumption that this is correct.

    • vto 9.5

      Carters will sell a piece of timber for a multiple times (up to 5x) the price in NZ as they sell the same piece of timber in Australia. Fact. Seen it.

      Destroy the Carter / Fletchers cartel
      Destroy the Fletchers / Holcim cartel

      There are massive factors. Supply of land comes nowhere the same effect as smashing these.

      In Chch rebuild we have seen suppliers of cheaper products come in under these cartels and simply be taken out by these cartels, such is their power (and gosman, don’t sit at your desk waving around some theoretical shit about market efficiency – get out in the real world and see how these things are done. NZ least corrupt? ha ha ha ha ha ha ha ha….

      No business should be able to own or control more than about 20% of a particular sector. Force Fletchers to sell and split up their business. Its not as if this has not been done before – oil in the US is a classic example. Land in NZ another. Been done before. Should be repeated now.

      • Gosman 9.5.1

        I have no problem with encouraging greater competition in the building sector. Why hasn’t the media/opposition political parties taken up this angle if the building companies were making super profits from building material?

        • vto 9.5.1.1

          So you would support moves to break up these cartels and bring maximum ownership / control in a particular sector to something like 20%?

          • Gosman 9.5.1.1.1

            Quite possibly. If it was shown that these companies were reaping superprofits and acting in an noncompetitive manner then I would support action. If you have such evidence it would be useful to present it.

            • vto 9.5.1.1.1.1

              No need to show superprofits of course – those can be too easily hidden and too hard to find. There is plenty of evidence of cartels and their breakups and the numbers / percentages of market share that are appropriate. Evidentary examples already provided above.

              What would stop you supporting such a move to break up these cartels?

              • Gosman

                Because of the disruptive nature of doing so. If there is no evidence of firms making super profits then there is no need to intervene to break anything up. Otherwise you would be constantly doing this in areas like super markets and IT.

                • vto

                  Your point about super-profits has already been answered so unless you have something new to add you should stop repeating yourself.

                  And you would not correct something that is damaging to the economy and community because it is temporarily disruptive? Don’t believe you.

                  Why should such disruption be a factor when it has not been in past cartel breakups?

                  • Gosman

                    Government enforced break ups of private property is not something that I believe should be encouraged without good cause and strong evidence. I understand you take a different view point due to your political leanings. That is fine with me. It is unlikely you will convince me of the benefits of doing so in the building supplies and construction sector based on the information you have supplied so far.

                    • vto

                      Nope nothing to do with political leanings – everything to do with what I see i.e. the building sector cartels rip us off. Everybody in this sector in Chch knows it, sees it and talks about it. Nothing gets done about it for reasons to do with politics and power.

                      If the only reason you wont support it is evidence of their existence and consequent harm then that is no reason. The evidence is there and so too is ample historical evidence – historical evidence around the appropriate level of ownership/control as already pointed out. Ignore it if you wish – that just reflects on your political leanings, your credibility and your lack of exposure and knowledge of the sector.

        • tracey 9.5.1.2

          Gee, Gosman the media haven’t taken up the chase? and opposition parties… cos many opposition parties have been in govt at different times kow-towing to the same industry.

          Fletchers is a BIG employer, so is Carters and Fletchers and successive governments have been pee-ing in each others pockets for decades.

          Why do you think James hardie has survived the leaky home debacle so well? The unproven scuttlebutt in Auckland legal circles is JH insurers flew into Auckland in a charter jet one day to meet with Riskpool (insurer for Auckland and other councils) and made a contribution on the basis that Auckland and other councils will NEVER join JH to an action but can go after them if someone else joins them first.

          many years later, with few financially able to join JH ( a few did) , then the MOE sues JH and it settles with them.

          These guys lobby like hell, and they get to sit with PM’s and Ministers and chat away about loss of jobs and blah blah blah… and presto the builder gets limbered with 80% of liability in a process where he/she took out about 25 bucks an hour for the job while others took 250-300 an hour (architects / developers and others)

          I see BRANZ is advertising for new employees and still pretending it is an independent research/testing unit for the good of the industry and NZers. BRANZ was very complicit int he leaky building debacle (and like the BIA – forerunner to DBH) got away scot-free.

        • framu 9.5.1.3

          why dont you ask the opposition instead of using it as some sort of qualifier for your “position”

          • Gosman 9.5.1.3.1

            I am merely pointing out a potential flaw in the position that the building companies are rorting the market to make super profits. It may well be the case however I would think it would be pretty easy to identify as such and if it was I would expect one of the Opposition parties to make a big deal of it. This would be right up Winston Peters ally for example. Little guy being screwed by big faceless corporation. He’d love it.

            • tracey 9.5.1.3.1.1

              goal post alert.

              Peters doesnt rail against Timber cartels so no rort going on.

            • framu 9.5.1.3.1.2

              so go and ask them then – off you trot

              i dont care about your sad little explanation because your asking the wrong people

              and its a tactic you use all the friken time – its sad and obvious

      • tracey 9.5.2

        +1

    • If it was about supply, we would see rental increases driving house prices, we are seeing the opposite.
      Also, on the supply, we have finite land, on the demand side, we have every single investor in the world.

      It’s speculation that is driving the price increases, which are then passed on to renters.

      Speeding up processes can (and should) be done by the institutions that administer the processes – Local Councils.

      And greater intensity that also ensures public ameity is required in our larger city centres.

      So, yes. I’m Ok with all of that. And opposed to gutting the RMA.

      • Gosman 9.6.1

        If it was overseas demand driving the majority of the price increases then you would expect to see rental values decreasing as the investors attempt to fill their properties with tenants. This is unless they are keeping them vacant. This is not usually a winning investment strategy in the long run however it is a possibility. Do you have evidence this is happening?

        • vto 9.6.1.1

          “If it was overseas demand driving the majority of the price increases then you would expect to see rental values decreasing as the investors attempt to fill their properties with tenants”

          Only if such purchases were taking out owner-occupied homes. Do you have evidence this is happening?

          • Gosman 9.6.1.1.1

            No, If they are buying up new builds they would still be impacting supply on the rental market UNLESS they occupy the house themselves or keep it as a holiday home. However the last would be identifiable in the number of vacant properties in the country. That would be rising. If it isn’t then foreigners buying property here has very little impact on housing if rental costs are flat or rising.

            • vto 9.6.1.1.1.1

              “No, If they are buying up new builds they would still be impacting supply on the rental market ”

              No. Only if they are buying up new builds that would have otherwise been bought by owner-occupiers.

              • Gosman

                The alternative would be people buying for letting purposes. in which case the impact on the rental market is exactly as I stated. If supply of houses is not the main driving factor in the market but demand from overseas then unless the overseas buyers are keeping the houses vacant then buying up houses would drive down the rental market regardless if the purchaser is a domestic or foreign buyer.

                • vto

                  As mentioned in first reply to you gosman … too theoretical from an office desk to have any cred. You should go pound some streets in workboots

                • The main driving factor is untaxed capital gains.
                  The market is every investor on the planet.
                  At a time where there is lots accumulated capital.

                  If the function of housing is to house people who live in New Zealand, why is the market not limited to domestic buyers?

                  • framu

                    the other main driver is that the self same ideological travelers as gossman have already ripped the populace blind so now they are gun shy of non real estate investment

        • framu 9.6.1.2

          weres your evidence? – you dont provide anything but attempted thread domination and ever shifting goal posts

    • framu 9.7

      that will only work if you increase supply in such a massive scale that it floods the market

      We keep getting told that demand is outstripping supply to the point where we need to build more houses every year, for several years, than is humanly possible in order to keep up. So just freeing up land wont dent demand in the slightest

      theres also nothing stopping developers drip feeding to maintain prices, nothing requiring smaller first homes and other affordable houses to be built and nothing requiring a developer to pass on any savings during construction

      your talking simplistic horseshit

    • Lindsey 9.8

      Auckland has 5 years worth of land available now.

  10. hoom 10

    Massive building of Affordable housing is the only solution.

    Either directly by Govt ie KiwiBuild which can directly & quickly make a big difference or by Regulation to require certain % Affordable/Tax breaks for % Affordable/other similar direct incentives to Affordable which would probably be slower & less of a difference.

    Breaking RMA will not help housing affordability, just help rich dicks more easily chop down trees on public land, build obnoxious mansions & generally fuck up the environment.

    • Gosman 10.1

      You would still have a problem with land availability. Instead of the problem becoming the developers you would have made it a central government one as well as making it much worse by Government competing with the developers for the same shortage of available land.

      • tracey 10.1.1

        the Government would have no agenda to slow down the rate it builds on the land that is available. Some developers, to maintain higher prices, can pace their developments to accommodate a higher price thus defeating affordability. that is one BIG difference.

        AND some of the land being released would be Crown land so no need to compete with anyone, let alone developers for the land.

        • Gosman 10.1.1.1

          Do you have evidence that this is happening at the moment? Certainly Auckland City Council (if not the Government) has little incentive (unless they are corrupt) for not calling out developers who do this.

          • tracey 10.1.1.1.1

            what?

            do you have any evidence that the matter would be made worse by government competing with developers for land? You need to catch up on who owns the land being talked of being freed up Gosman.

      • lprent 10.1.2

        The primary cost component of all housing in Auckland is land prices. The solution is pretty simple. Start knocking down those Grey Lynn, Mt Albert, Parnell villas and old light industrial and retail areas. Use the land for putting in 3 or 4 story 1, 2, and 3 bedroom apartment blocks with parking underneath.

        I live in an apartment block with 60 1 bedroom apartments on it and two car parks per. It was once a third of a house demolition yard. The other bit got about 20 3 bedroom townhouses.

        But the land value of all of them is far less than the building value. Which is the opposite to most housing in Auckland. And I live within walking distance of the centre of town.

        I’d say that defines the solution. If the developers won’t do them, then the government should do what it has been doing for the last century – build affordable apartments this time. Make sure that they are built right (and make sure that developers carry full two decadal insurance for their botchups). Then watch the supply catch up with demand…

        And I *like* living in an apartment. I’d like a slightly bigger one, but that is only because Lyn moved in a bit under 7 years ago. But I’d really hate

        • Brendon Harre 10.1.2.1

          lprent see my comment further down post about public housing in Singapore. Here is some background information http://en.wikipedia.org/wiki/Public_housing_in_Singapore

          Japan I believe does something similar but because they are not geographically restricted like Singapore they also balance intensive public housing around transit hubs with an absence of urban growth limits. So getting the most out of both supply vents -‘up’ and ‘out’.

        • Tracey 10.1.2.2

          i would move to an apartment but auckland apartments are slow to allow pets. i also agreed with 3 to 4 level apartments in my neck of the woods…. mt eden

      • Draco T Bastard 10.1.3

        There’s no problem with land availability. Never has been. The problem is that developers keep building out rather than up and the bloody stupid local governments and central governments encourage them despite the fact that doing so results in ever higher rates of poverty.

        Cities should be compact and rise high. This keeps the costs of services down (ie, rates) and the livability up as all the services that people live in cities for are nearby. Benefits economically as well because work is nearby, the industries that the business needs to coordinate with are also nearby and the cost of transport goes down both in land use and resource use.

        The demand of the RWNJs that we need more land is pure bloody stupidity as it costs ever more. And then, once they got their demands of a sprawling city met, they whinge about the high prices and rates that they’ve forced on us by their stupidity.

        • Gosman 10.1.3.1

          You’re discussing this with the wrong RWNJ. I have no problem with greater intensification. However that is still increasing the supply.

  11. The Lone Haranguer 11

    Tracey, it seems we all know theres a problem, but really nobody has a workable solution (including me).

    As long as theres potential capital gain, folk will speculate.
    So a capital tax? that just takes cash out of already stretched households.
    A capital gains tax? needs to have NO exemptions if its goal is to deflate the house price increases in the two main cities – but thats politically unacceptable to those voters who actually vote

    And if the bubble bursts, (as some appear to be looking forward to) that will negatively affect the lives of pretty much everyone. The banks will massacre those with loans and negative equity and wont be keen to loan to new buyers without new and expensive add ons. The bankers will not lose. Ordinary peole will.

    And those with equity and no debt will keep collecting houses at the expense of everyone else.

    • Molly 11.1

      There are methods, one off the top of my head:

      Putting in some form of perpetual affordability lien on properties, so that they can never be sold for exorbitant profits. (Similar to that on retirement homes).

      A good book to have a look at is “The Company We Keep” written by John Abrams who is a self-taught builder and developer on the expensive Martha’s vineyard. He realised a few decades ago that affordable housing in that area was being lost, and over the years – he and his company partners – came up with a various number of successful ways to counteract it.

      There is a website for his development company, South Mountain and for his model of cooperative ownership, The Company We Keep

    • Tracey 11.2

      there must be methods but maybe that dont get to the public cos of vested interest in status quo.

    • Naturesong 11.3

      A capital gains tax will serve to cool the market as investors who are looking for investment opportunities won’t go to the tax free capital gain as their first choice.

      A capital gains tax will cause some of those investors to leave the market, slowing the rate of increase.
      Removing overseas investors from the market will also reduce the rate of increase.
      Then, smash the carter / fletcher cartel to reduce the dead weight of monopoly profits from building materials.

      • Molly 11.3.1

        1. Legislation that restricts the sale price of overseas-owned residential property to the price that they paid for it.
        2. Legislation that required 10%-20% of all development in SHA’s to be perpetual affordable housing. (ie. An independent quantity surveyor is employed to determine the cost of the build, and then a small margin is put on for the developer, and they are onsold to occupiers, or renting out as social housing. This has been done successfully in other countries)
        3. Encouragement through schemes for residents to develop their own communities – along the lines of cohousing. Some cohousing developments in other countries work out a percentage of income they can all afford and pay that towards their share of the development mortgage. It is interesting to read comments from those that have higher incomes, and who don’t begrudge their extra personal financial contribution, because of the value they see in their design, and their community.
        4. Promote efficient and resilient use of materials, and better design considerations of energy consumption for residents.
        5. Allow some areas of innovative housing schemes or projects. Existing developers will not change, the ka-ching of the till is still working for them. Mike Reynolds (who is the developer of the Earthship building method) achieved this in his home state of the USA.

        • Lloyd 11.3.1.1

          Removing the requirement for on-site parking would result in the freeing up of 10 to 20% of every property.

      • saveNZ 11.3.2

        Nope a capital gains tax will not be the answer as there are so many loop holes that only the poor mums and dads will be paying it, the savvy accountants and lawyers will have the IRD in court for decades, the foreigners will never declare it and leave the country. Remember this is the country where most of the rich listers aren’t on the top tax rate.

        You need a property tax, like stamp duty that is collected via the title transfer, quick, easy and unavoidable. Even a small level on every sale would be enormous amount of quick easily collected revenue. Even half a percent would be huge. First home buyers exempt.

        In the UK the real estate agencies only charge 2% generally and pay all advertising costs. With a stamp duty idea, we might find that real estate fees start going down half percent, but all that revenue could be a real winner for the government.

        • tracey 11.3.2.1

          and with property investors watching every dollar…

          • saveNZ 11.3.2.1.1

            Yep it is fair, gains revenue quickly and it will make property investment more taxable and transparent. I would not care about paying a property tax if it was low AND more important every single person is caught not just the honest people! This would very lightly dampen property which is what you want, if it is too heavy a crash would happen and hurt property owners. It is a fine line.

            • tracey 11.3.2.1.1.1

              if it was low, how would it dampen the prices?

              • saveNZ

                People will hold property longer and speculate less if they have to pay a tax each time. My view if you are going to tax property make sure it is fair and transparent and everyone is caught. Capital gains will make little money for the government as there are so many ways around it, only honest people will pay it. Enforcement will be expensive. Property goes up and people improve it, so it is very difficult to say what is gain and what is improvement etc etc….

                Politicians love it cos they think it sounds tough, but capital gains is not tough, and very inefficient. Tough is making the solicitors responsible for collection at title transfer… and no tax no title.

        • Naturesong 11.3.2.2

          The tax is less about revenue for the govt, and more about sending a price signal to potential investors; with a CGT they no longer get a free lunch.

          As for evading the CGT, pretty sure if we looked closely at the different CGT regimes we could make it reasonably bulletproof – it’s not a new idea, we know how it works, what it can and cannot do.

          • saveNZ 11.3.2.2.1

            You sound like a government official approving the Sky City deal…. how can it go wrong…. if we looked closely… we could make it reasonably bulletproof.. I think the word reasonably shows how weak it is….
            Umm taxes for property should be real in my view, not just ‘sending messages’ out there… I think groups have done figures that show that CGT will collect very little tax therefore not really sending that message….

            • Naturesong 11.3.2.2.1.1

              Pretty sure learning from other countries mistakes when writing and implementing legislation is quite different to the corruption of process which continues to define the sky city deal

              And yes, taxes need to be real in order for the signal to appear on a prospective investors spreadsheet.

  12. Brendon Harre 12

    National can no longer blame Labour for the housing crisis

    Yesterday on National Radio it was hard to get any sense from Nick Smith regarding the housing crisis. Is there a problem or is there not? Listening to Nick Smith you wouldn’t know what the government is thinking. What is going on?

    I believe the explanation is we have reached the turning point where National can no longer blame the housing crisis on Labour.

    That explains Nick Smith’s flip flopping over whether he supports the latest Demographia statistics or not.

    This can most easily be seen when you follow the history of the crisis.

    In 2002 with only my own savings I bought a small 2 bedroom town house in Central Christchurch for $160K, about 4 times my modest single income. I hadn’t risen to the top of the scale registered nurse income at that point and my future partner who was working was soon to join me so housing affordability was quite easy for us. By 2004 my house was worth over $200K I became concerned this wasn’t a temporary boom or bust to do with economic good times, speculation and such like. That it was a structural change in housing supply causing the problem. I wrote to Michael Cullen saying so. He replied that it was other factors meaning a strong economy. Maybe he could be forgiven for not getting it. The Demographia statistics were just coming out and the GFC had not occurred.

    A few years later ground zero for the GFC in 2007 were the over inflated supply constrained housing markets of North America. Those markets with median house price to income ratios of 8 to 9 not those with ratios of 2 to 4. It was obvious the expensive housing markets were going to crash because with freedom of movement it is unsustainable for some markets to be more than double the price of others without a correction occurring.

    National got elected to government in 2008 partially on promises of restoring housing affordability, by removing red tape, reforms to the RMA and local government. Action didn’t follow words though.

    In 2010 and 2011 Christchurch earthquakes required a strong housing supply response -again expected action from the National led government on new urban developments to replace earthquake damage homes did not occur. Christchurch residents responded against the status quo urban plans by leap frogging over CCC/Cera planning restrictions to sprawl across the Cantabrian plains to the adjoining Council jurisdictions.

    By 2012 house prices were re-inflating following the dip post GFC. Supply constraints had not been remedied.

    In 2013 Nick Smith signed the Auckland Housing Accords with Auckland Mayor Len Brown to remedy housing supply, quoting concerns about Demographia’s high number for Auckland’s median house to income ratio.

    In 2014 house prices were rising as fast as under the Clark/Cullen Labour government. Auckland’s median house to income ratio has risen past 8.

    Today Nick Smith who fronts the government’s response to the latest Demographia survey is again promising RMA reforms.

    The government has no creditability on the issue, promised reforms have been late and inadequately delivered. Land bankers have just been given a slightly faster route to the market, there fundamental exploitative business model has not be replaced by competition and therefore lower land prices. This and other evidence points to the fact National is a crony party not the free-market party they claim.

    Nick Smith saying the same thing in 2015 as in 2008 doesn’t work. Now the Demographia statistics are an embarrassment and Nick Smith’s only option is to take the scoundrel’s way out and belittle them.

    Listen to him dodge and weave on National radio. Note as far as I can see Nick Smith criticism of Auckland’s median income numbers is an incorrect quote of the reports numbers.

    In 2015 none of the young nurses I work with are planning on buying a home. Certainly none on a single income with no help from their parents. The ordinary dreams and expectations of a generation have evaporated away due to broken promises and a lack of political will.

    The National government faces further problems due to the housing crisis. The opposition now acknowledge that a supply response is necessary. They have plans to build 100,000 public houses. It may not be the free market solution many were hoping for. But it is a legitimate approach to affordable housing.

    In Singapore an island of far greater geographic constraints than Auckland. Demographia statistics show a median house costs 5.0 times median income. That is a lot better than Auckland’s figure of 8.2. Public housing similar (although in Singapore they build on leasehold land) to what Labour and the Green party are proposing is attributed for this relatively low cost of housing in Singapore.

    There would be ways of putting in competitive tension throughout the urban property market by allowing a combination of free market on the fringes and Singapore type public housing around denser transit orientated nodes. Something similar is done in Japan and it has successfully deflated the 1980s housing bubble down to 3 to 5 median incomes despite having some of the largest cities in the world.

    • Tracey 12.1

      great timeline brendon.

      thanks

      • Brendon Harre 12.1.1

        Your welcome Tracey. : )

        If I could I would like to offer the following advice.

        When it comes to housing the media often trots out ‘experts’ like economists from a Bank as some sort of independent expert. The equivalent of interviewing a physician about a medical matter.

        This is wrong, a bank’s chief economist title should really be ‘chief sales officer’.

        Their aspiration is to make more revenue by selling us more debt. They hope to join the 1% and earn the $million dollar salaries. Their vested interest is not the same as the ordinary person on the street who wants somewhere to live.

        They and other vested interests do this by selling emotions wrapped around some believable set of ‘facts’.

        Greed that we all can get wealthier by selling existing houses to each other at ever high prices.

        Fear that if we don’t get on the property ladder today we will miss out.

        Shock and horror that even if more affordable homes could be supplied it would be bad because it would cause some nasty economic depression.

        Despair that we will never supply affordable housing even if that would be a good thing because there are too many selfish people out there.

        In fact all these ‘facts’ can be argued against. What is often harder to combat is how to counter emotions that these ‘debt boosters’ have entrenched in our collective psyche.

  13. adam 13

    Who would have thought ah. In little old NZ the Yoeman dream was dead. We have killed off all the towns and now have a couple of cities from which to control the population. Bless you all, you shortsighted idiots in government and the bro-ocracy. Bless you all, for making us a stale impression of the US.

  14. Draco T Bastard 14

    Around the corner some neighbours bought a 3/4 bedroom bungalow with a pool (fully renovated) for $1.7m five years ago. They broke the price ceiling in our area. They have lived in it. Not done it up, just enjoyed their beautiful home. Just before Christmas they sold it for $2.8m.

    That’s $200k per year income with no tax and for doing nothing. Meanwhile someone on the minimum wage is working hard, paying taxes that they can’t avoid and, at the end of the year, is probably worse off because the rent (another tax really) that they’re forced to pay has gone up to cover the new owners mortgage.

    What we’re seeing here is what’s wrong with the capitalist economy. A few people get rich for doing nothing while the rest of the population are forced further and further into poverty.

    • The Lone Haranguer 14.1

      DTB, the riches arent just going to a few.

      Theres maybe 500,000 to 750,000 folk in Auckland and Christchurch who are riding the wave and they will crucify any politicians who somehow, unilaterally can drop the housing market by 50% of its value.

      By and large, those folk wont vote for any party that restricts their home equity retirement schemes.

      Then maybe 75% of them will be upside down on their mortgages, and history (2008) suggests that the Polys will probably bail out the banks ahead of the little people.

      The other thing is why should those in Auckland and Christchurch be able to bank capital gains on their own home (Labour party policy last election) when the poor saps living in Tokoroa in their $85,000 homes will never get those tax free opportunities?

      If you want to cange the market you cant leave half the houses out of it. A CGT should apply to ALL properties if it is to be fair

      • tracey 14.1.1

        15% CGT on the neighbours capital gain is about 150,000k. They gain 850k for doing nothing but live their lives as DTB points out.

        It gets slightly complicated though in our case…

        we paid 540k for the house… it turns out to be a leaker. We have 135k unrecovered legal and expert costs and the costs of repairing the home.

        if we sell for, say, 1.4m is the CGT on the difference between 540K and 1.4m or some other figure?

        In any event I am happy to pay CGT on my home IF it is a viable solution.

      • Draco T Bastard 14.1.2

        You’re right in that people will vote for ever increasing house prices no matter how delusional it is. The Hey, I got rich buying a house and doing nothing else should be ringing alarm bells in everyone’s heads but they all just look at the rich getting richer by being rich and want to be just like them little realising that they’re part of the problem.

        There’s many things wrong with our socio-economic system:

        1. The private banks create the money with almost no restrictions
        2. Being rich pretty much guarantees you will be rich for the rest of your life and so will your children – all without effort
        3. Being a worker pretty much ensures your descent into poverty and that applies to those comfortably in the middle class today and probably some in the lower band of the 1%
        4. It not only encourages excess resource use but is predicated upon it

        The rich will consume our society if we let them and we are letting them.

      • b waghorn 14.1.3

        @ the lone h “Theres maybe 500,000 to 750,000 folk in Auckland and Christchurch who are riding the wave and they will crucify any politicians who somehow, unilaterally can drop the housing market by 50% of its value.”
        And Key knows it that’s why he’s happy to ride the bubble to election wins .

        • Ad 14.1.3.1

          And he did.

          Key is amply rewarding those who voted and funded his party back into comprehensive power with the RMA reforms out tomorrow, which will reward developers above all else.

          Key is now surfing one of the better economic sweet-spots New Zealand ever seen, with:
          – above 3% gdp growth
          – unemployment down to 5%
          – inflation near 1%
          – falling oil costs and hence a lower cost economy all round

          Of course there’s huge bubbles in dairy and property that could pop.

          More likely that Auckland’s property boom will continue while immigration stays high (which it will so long as Australia’s economy cools), dairy prices will recover back to $6 payout as Fonterra figures how to alter its own commodity trading systems, Christchurch rebuild keeps going for years, and previously marginal parts of the economy like software servicing take off without any public sector assistance.

          That is the economic context for Key to sustain his party in, and for the combined and far smaller opposition to find space in.

          • b waghorn 14.1.3.1.1

            It’s just a pity he’s not a real leader , a real leader carries all with him not just enough to keep him in power.

      • Murray Rawshark 14.1.4

        Whatever solution we use, someone is going to get hurt. So far, the rich have been doing the hurting with the excessive rents they charge and all the pain has been going to the poor. The time is well past where people should be able to get filthy rich by living in a house. They’ve had it good and, for all our futures, it has to stop.

  15. Rob 15

    Houses in Auckland , or NZ for that matter have not declined, we do have over 1.4M houses in NZ. I think the housing issue has been accelerated due to more migration into NZ, less people leaving NZ and also many returning ex pats. So demand for housing especially by ex pats in premium suburbs is very high. During the GFC, new housing starts did plummet from a high in 2007 of about 29,000 (houses and apartments PA) to the bottom of about 12,000 in about 2012. If you annualise where we are now we are at about 24,000, so still some capacity available in materials , however we our biggest constraint is skilled labour.

  16. tracey 16

    Speaking of Land Banking, some Crown Land is available…

    “Greetings Valued Clients
    I have a very limited time opportunity to find a buyer for a 3.6HA lot in Hobsonville, with a draft subdivision plan for 58 sections of 400 sqm or more.

    Fixed price $4.5m.

    The catch is that the subdivision cannot proceed until certain infrastructure improvements have taken place.

    So the land bank could be for 3 or 4 years.

    The potential retail of the sections in today’s dollars is around $400,000 a section.

    So there is significant upside potential.

    The other catch is that the buyer would need to be unconditional by Thursday 29 January and settle a month later.

    If these dates are not met, the land will go to public tender by the Crown.

    Contact me if you are looking for such a land bank and can work quickly (no date extensions are possible) and I will provide details and a site visit as required.

    Kind Regards – this is a hard one – but with a serious upside.

    Ian

    Ian Revell
    Senior Sales Consultant
    Prestige Real Estate Ltd MREINZ”

    “Mr Revell was the National MP for Northcote when allegations that he threatened to get rid of a police chief after being issued with two parking tickets cost him his high-ranking job in the House in 1999.”

    Police minister did not read Revell file
    5:00 AM Friday Feb 19, 1999

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    New Zealand

    By Andrew Laxon

    political reporter

    The Minister of Police, Clem Simich, has admitted being given papers three months ago which showed that Northcote MP Ian Revell threatened a North Shore police chief over a $40 parking ticket.

    However, Mr Simich told Parliament that he did not read the file from police national headquarters because his staff thought it was already being dealt with by Commissioner Peter Doone.

    Told by the Act leader, Richard Prebble, that he should have been briefed if he was in control of his department, Mr Simich said that when his office received the file on November 10 the issue seemed to be over.

    “The police superintendent concerned seemed to be satisfied at that point that the matter was at an end. My staff decided that it was not a matter I should be involved in…”

    …He left the police in 1990 with an ankle injury and a $180,000 payout under the police early retirement fund for medical unfitness.”

    Earlier, Mr Revell announced on the front steps of Parliament that he was stepping down as Deputy Speaker to protect the integrity of the Speaker’s office.

    He said he would not resign as an MP because he had been arguing for his constituents on an important issue – that police should not give parking tickets on the word of untrained parent volunteers at schools.”

    • saveNZ 16.1

      Is this real? Shouldn’t all crown land go through a public tender process???

      Bet some crony is poised ready to make a lot of money on the taxpayer from this one.

      • tracey 16.1.1

        it is real but going to the market ought to achieve a similar thing as a tender.

        I am more interested in how Mr Revell got the business.

        • saveNZ 16.1.1.1

          Don’t agree at all! 4.5mill fixed price for a government land in a very fast rising market, should def be public tender like a mortgage sale with huge marketing campaign to get the best price.

          But agree very suspicious that Mr Revell got the business. Might repost this one.

      • saveNZ 16.1.2

        This so wrong on so many levels….
        Why is crown land being sold?
        Why is crown land not being tendered to get the best price?
        At $400k a estimated retail section, some crony is obviously going to benefit significantly from the RMA reform…..
        Oh National you are such hypocrites going on about affordable housing!
        And to top it off, It’s so good to have friends from the crown giving disgraced ex National MP’s those listings!

  17. esoteric pineapples 17

    Where have all the houses gone
    Long time passing
    Where have all the houses gone
    Long time ago
    Where have all the houses gone
    Gone to wealthy speculators
    Every one
    When will voters ever learn
    When will they ever learn

  18. Dave 18

    Catch 22 swap accomidation poverty for energy poverty
    We need a crash and we need one badly
    There no way a 50000 can classed as affordle I work in seen what’s going up around botany a wouldnt class what there building or even the way there building as efficient or affordle these homes are not for new zealanders and until there political will to tackle the river birtey money flowing through new Zealand wreakimg the markets of people who live here earn there income from this economy there is no fairness or justice
    I see an all out crash as the only way restore any form of sanity to new Zealand

  19. Paul 19

    Alcohol industry paying the Herald well to seed such stories.

    http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=11389061

  20. Nope the problem is that Auckland (and to a lesser extent, Wellington) are the only places to get a decent job in the country. If economic activity was shared out a bit around the rest of the country, a lot of Auckland’s problems would be resolved.

    • b waghorn 20.1

      I’m assuming by decent Job you mean decent money. 45k a year in small town nz shouldn’t be to hard to find and houses are worth only 3 to 4 times that in the big cities houses are worth 8 times the average wage I believe.

      • vto 20.1.1

        b waghorn I just replied to a reply of your to mine yesterday on om, if you wish to peruse and respond. I would be interested in your view on the particular matter mentioned

  21. Rodel 21

    According to Dr Smith Auckland doesn’t have a housing problem. It has and I quote,
    ‘a housing affordability challenge’.

    Real Luntz language. e.g. Oil drilling? No- it’s ‘Energy exploration.’
    Clear felling of forests? No. it’s ‘healthy deforestation’.

  22. Binders full of women 22

    It,s an Auckland problem….. The provinces are awash with houses… Recently read about a 69,000$ Three bedroom house, with two types of starter discounts and 11 years of paying $112 a week you have a freehold house in a vibrant coastal town with schools, hospitals, industry, huntin, fishing, you name it, hell they even have a film festival, 1 hour 15 minute drive from two reasonable sized cities with mega arts, industry, markets, cinema, theatre. so if you are paying $300-400 rent you could be paying $112 to own your own house.

    • Tracey 22.1

      omg is it just an auckland problem? who would have thunk it.

    • tricledrown 22.2

      BWoFW and a $14 an hr part time job!
      Even in Australia immigrants are forced to move to less populated areas of the country where their is under utilized infrastructure!

  23. Tracey 23

    despite economy of scale auckland is now the most expensive place to buy a new home…

    rent went up 2.2% last year. how much did lower earners wages rise?

    http://i.stuff.co.nz/business/money/65260153/Now-Auckland-gets-the-title-of-most-expensive-place-to-build-a-house

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  • COVID-19 updates
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