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 »