Real Estate

Turns out there is affordable housing, it’s just not in Auckland

There is considerable moaning from the left about the lack of affordable housing.

As I have noted many times house are affordable even in Auckland. In fact there are so many that people are forced to sell them, and if they were truly unaffordable then none would sell, but sell they do.

But there are many affordable housing options, and is just that they aren’t in Auckland.

At  20, Stacey Knuth of Whanganui has achieved what few young Kiwis her age can still do Рbuy a house.

She bought a state house in Gonville, a suburb which according to September quarter housing figures has the third-cheapest housing in the country.

A far cry from Parnell or Ponsonby, a house in Gonville had a median sales price of $110,000.

And it’s in close proximity to the country’s cheapest suburb, Castlecliff, where houses this quarter went for a median $88,000.

But Gonville has another distinction. It tied with Wellington’s Brooklyn for the quarter’s highest jump in house sales, up 145 per cent on the same period last year, due in part to a clutch of state houses on the market.

Whanganui has become a bit of a poster child for declining provincial towns, but to Knuth, who is locally born and bred, Gonville is a great place to live.

“I’ve been living here for about two months now and it’s really nice, it’s a good little four-bedroom home . . . It’s a good little neighbourhood, I’ve had no trouble.

“There’s no houses in front of me and no houses out back so on a clear day you can see the mountain straight out the front and then out back you can see the sea.”

Read more »

Native advertising? Yep

Read this article in¬†the¬†NZ Herald from yesterday…it makes you wonder how this is even news.

Canadian migrant Genevieve Westcott remembers the 20.5 per cent mortgage rates of the 1980s.

“When we first came to New Zealand in the mid-80s, we had planned to stay for just a year to sample the Antipodean delights. We had left behind a beautiful house in Vancouver. We were horrified at the mortgage rates in God’s Own. In 1987, when I was headhunted back to Canada, the mortgage rate had peaked at 20.5 per cent compared to Canada where the rate was 9.75 per cent for a one-year fixed mortgage. We didn’t waste any time buying a new home in Toronto,” the broadcast journalist remembers.

But by 1991, she had returned here, buying a sprawling villa in Devonport’s Summer St where she lived for 17 happy years.

“Our mortgage rate then, as I recall, was about 14.5 per cent. Luckily we brought Canadian funds with us from the sale of a Toronto home to bolster our purchase. But we still had to go to the bank and it took us a few years to pay off the mortgage. We had quite a party to celebrate when the momentous day arrived.

Read more »

Pimping the Poor, Ctd

Simon Collins returns to pimping the poor.

Case 1 – the brown poor…who apparently have to live in cars.

Serial breeders moaning about living in ac ar  Photo/ NZ Herald

Serial breeders moaning about living in ac ar Photo/ NZ Herald

The Tuuu family – mum, dad and their six children – have been living in a van for a week because they cannot find a house.

Two of their young children have become sick, and the baby, Maua, has developed a cough.

“It’s very cold at night,” Vaiopa’a Tuuu said. “I’m just so worried. I worry about my kids.”

Tamasailau Tuuu, his wife and their children, aged from 15 to 3-months-old, were doubling up with another couple and their three children in a three-bedroom house after their landlord sold their own rented home in Clendon, South Auckland, two months ago. But their friends asked them to move out.

“She was worried about her tenancy, and the neighbours were complaining about my baby crying at night, and the house was overcrowded and her kids needed their own privacy,” Mrs Tuuu explained.

Mr Tuuu works fulltime at the Zeagold chicken farm in Takanini, but is classed as a casual labourer so his net pay fluctuates between $800 and just $500 a fortnight.

Even with $512 a week in family tax credits and accommodation supplement, that is not enough to pay for a private rental. Average rents in Manurewa have risen in the past year from $382 to $408 a week for a three-bedroom house, and from $436 to $457 for four bedrooms.

So the family applied to Work and Income for social housing and were placed on the waiting list on September 9. Almost a month later, they are still waiting.

and Case¬†2 – the white poor…who are “trapped and paying half income in rent”:

Waterview couple Iain and Bianca Davies feel trapped in a rented house that chews up almost half of their net income.

They earn $960 a week, including family tax credits for their three children plus an accommodation supplement.

They pay $450 in rent for their four-bedroom home, and count themselves lucky because their landlord has not raised their rent for four years. They even manage to save about $50 a week. But they say the only way they will ever be able to buy their own home is to move out of Auckland.

“The problem is you can only have $16,200 in cash assets to get the accommodation supplement, and that threshold hasn’t changed for years,” said Mr Davies, 31, who helps families with housing problems every day in his work as budget advice manager for CARE Waitakere.

“As soon as you go over that you don’t get an accommodation supplement, so that’s a real poverty trap. You obviously need more than that to buy a house.

If we couldn’t get the accommodation supplement, we’d have to move out of Auckland, or I’d have to work more, or Bianca would have to work.”

Mrs Davies, 36, home-schools their eldest daughter Anwen, 5, and plans to do the same for the two younger ones, Ecclesia, 2, and 1-year-old Floriss.

They buy their food from a local organic food co-operative and “pretty much don’t spend money on extras”. Mrs Davies cuts her own hair and the children’s hair.

“We are fully aware that to buy a house in Auckland you need to be on a double income and earning at least $100,000, so for us it’s not a reality. It will be down the track, up north somewhere, where house prices are just dramatically less.”

I’m becoming increasingly …hmmm, (whats a good word for it?) incensed,¬†infuriated, exasperated!, flabbergasted!¬† ….WHY are people soooo¬†THICK?¬† Read more »

We don’t want your stinking apartments

Ever desperate to continue pitching for an intensified future Lawrence Yule and his buddies at Local Government NZ have organised a conference and found someone, anyone who will spout on about apartments.

The cost of properties with over-inflated price tags can be brought down with a rapid increase of high rise apartment blocks and granny flats, according to an expert speaking at a property seminar in Wellington tonight.

Local Government New Zealand president Lawrence Yule will lead a panel discussion on housing affordability with Finance Minister Bill English, Auckland Council Deputy Mayor Penny Hulse, economist Arthur Grimes and New Zealand Council for Infrastructure Development chairman John Rae.

Aha! Someone who will say that building apartments will make a difference to house prices and demand.

Normally Arthur Grimes is considered to be pretty smart and he has some good things to say.

But it appears he lacks understanding precisely how the mechanism of property and how the buying market works.

In fact – not many people do at all.

New apartments have to sell for between 8,000 and 10,000 per square metre of floor space in Auckland on average to allow a developer a margin. That can drop slightly in the CBD if car parks are discounted off the price by not building them. A 100 sqm apartment therefore would have a sales price around $1m.

New houses have to sell for $3,000-3,500 psqm. A $1m house will most often be a big 250-300 sqm house on land with yard and so on.

Apartments have terribly high ongoing costs distributed through body corporate fees. Houses don’t. ¬†¬† Read more »

Why is property around the world so expensive?

The opposition was crowing about an OECD report that said New Zealand has some of the highest housing prices in the world…which for most of New Zealand is a laughable joke. Just yesterday I spoke with a friend who has just sold a 3 bedroom house in Whanganui for $97,000, when the house was bought 5 years ago for $124,000.

The figures are being held up by Auckland real estate and other main cities.

In some places, though, like the United States – property is cheap. In others like New Zealand and London property prices are out of control.

Now officials say that London it is so out whack it is no longer affordable for people on high or low incomes – it’s just not affordable.

In 2010, Nick Williams oversaw construction of luxury apartments at London’s One Hyde Park, where a penthouse valued at 175 million pounds ($297 million) sold last month.

Now he works at the other end of the property ladder, building discounted homes for those shut out of the boom.

Local officials have “realised the housing crisis for people who are neither rich nor poor is massive,” said Williams, operations director at¬†Pocket Living, which uses interest-free credit from the city to build homes selling for about 20 per cent below market value. “There’s a lot of pressure on us to deliver.”

In contrast to the $41.1 billion affordable-housing initiative announced this month by New York Mayor Bill de Blasio, London has opted for a piecemeal approach to taming home prices that have spiraled to records. The method has so far failed to meet Mayor Boris Johnson’s own expectations.

“The very fact that people above the median household income in London require subsidised housing is a strong indication of market failure,” said Andrew Heywood, a consultant who has researched housing for the¬†Smith Institute, an organisation that describes its mission as promoting a fairer society.

“The housing market is fundamentally dysfunctional.”

Read more »

More good news

Another crisis that Labour has been campaigning on has had a shot in the arm, simply from Labour declaring that there was a crisis in the first place.

Residential building consents continued to rise in March, which was the best month for house approvals in more than six years.

Some 1999 new dwellings were consented, 186 apartments which were largely rest-home units, and 1813 houses – the highest number since November 2007, Statistics New Zealand said today.

Business indications manager Neil Kelly said the trend for new dwellings had almost doubled since March 2011, but was still 28 per cent below the peak in January 2004. ¬† Read more »

Herald editorial on state house changes

The Herald Editorial discusses the changes the government have made to state housing.

An era ended yesterday. The idea that a state house was awarded to tenants for life has been consigned to history. Legislation that put an end to this idea passed through Parliament late last year, remarkably with little comment. The law came into effect yesterday just as quietly. From now on, tenants will face a review every three years to see whether their income or circumstances have improved.

The absence of much protest suggests the public attitude changed long ago. Yet it shows some courage on the Government’s part. Sooner or later an elderly person is going to be evicted from a house she loves in a neighbourhood where she has lived most of her life, so that a family may be given the three-bedroom home she has occupied alone, and she will be on television.

Normally Housing New Zealand would be able to offer her a smaller but reasonably alternative home. But another historic change that took effect yesterday means the corporation no longer decides who gets a house.

The role has been passed to the Ministry of Social Development, which will assess applicants’ housing need as part of all forms of assistance they require. That makes sense and should make the system fairer.¬† Read more »

Cunliffe goes over the top and signals Labour will continue to provide for bludgers

Aside from not wanting to let the facts get in the way yet again David Cunliffe is starting to adopt the verbal approach of his chief of staff, we had the Garner interview that was mate this and mate that which from a toff in a Herne Bay mansion is ridiculous.

We now have the totally over the top reaction to what is some pretty minor changes to state house tenancies, reviewing a tenancy in a HNZ house to someone whose luck has improved to free up a house for someone more deserving is now “disgusting”.

Clearly there is some media training going on but with the same results that Phil Goff and David Shearer had…you can’t completely re invent someone.

And what of the policy?

Sounds like pretty sensible stuff to me and no doubt any other working person out there paying private rent.

The changes, coming into effect tomorrow, give community housing providers greater access to money to subsidise people in desperate need of a home.

It means non-government groups can offer income-related rents for tenants for the first time.

Social Development Minister Paula Bennett said it would allow more diverse housing options for people on the waiting list, and make houses more affordable.

‚ÄúIt means significant savings for those renting the houses, with the state picking up a bigger part of the bill for them,‚ÄĚ she said.

The government has set a target for 20 per cent of the country’s social housing to be provided by non-government organisations by 2017. Currently there are about 1200, but Minister for Housing Nick Smith said he wants that number to rise to 12,000.

Many of those new projects will be in West Auckland ‚Äď where about 1200 of the 5500 people on the national state house waiting list live.¬† Read more »

Wait Til The Oldies Die To Own Their Home

All over the world, (but only really in cities desirable to live such as Sydney, Auckland, London, New York and Hong Kong), there is mass outcry from younger people demanding solutions to this myth of “affordable housing”. ¬†At the moment it is not affordable – to the taxpayers who are having to subsidise these crazy buy-a-vote schemes.

Here is yet another example why governments should not intervene in the property market.

Pension Funds about to be tipped into housing in UK.

That’s right, the baby boomers are about to get their cash all at once. ¬†And are tipped to throw it all into housing.

Added to that simultaneously a bottom-about face “Help To Buy” scheme in the UK¬†that is encouraging massive amounts of cheap debt to people who say they currently cannot afford a home therefore further driving up prices. ¬†A crazy policy but one that you would be a fool not to sign up to considering that future governments will be forced to bail out any bubble pop in the market. Easy credit is fuelling prices, not assisting affordability.¬† Read more »

Don’t blame Chinese for house price increases, blame Labour and people like Selwyn Pellett

Our politicians, particularly the more xenophobic of them, like to blame Johnny Foreigner for the rise in house prices.

The same is happening in Australia, with all manner of things like Chinese investors being blamed. The real reason though is somewhat different.

Labour and the Greens claim that restricting foreign investment and applying capital gains taxes will lower prices…and yet the opposite is true in Australia.

Foreign investors are not to blame for rising house prices. The real culprits are the taxing and regulating activities of Australian governments that raise the supply price of new housing.

Despite this, the House of Representatives economics committee is set to inquire into the impact of foreign investment on the Australian housing market at the instigation of Treasurer Joe Hockey.

According to committee chair Kelly O’Dwyer, the inquiry will consider whether the current restrictions on foreign investment in residential real estate serve to increase supply, as is their stated intention, or raise prices.

This is rather like asking whether foreign tourists increase the production of goods and services or raise consumer prices. The answer depends on how flexibly Australian producers can accommodate changes in foreign as well as local demand through increased output.