Despite the claims by media and opposition parties that there is no affordable housing the Herald goes and proves that there are plenty of homes for first home buyers…and they are all over Auckland, even in Ponsonby.
A reader emails about affordable housing.
Saw your post on the box solution but thought your question on why nobody was making solutions is interesting so here is my take on it:
To be affordable the cost of housing needs to be approximately 3 times the average income which is to say for Auckland around $220,000-250,000.
Houses were at this price or less only as far back as 2003 – 10 years ago. I recall friends acquiring a house in Kingsland for $238,000 in 2003 after selling a house in Waterview for $145,000.
Either a solution at or about $250,000 is required or alternatively incomes need to rise to reach $220,000 per annum.
The latter isn’t possible but it is fair to say incomes are part of the problem.
The most obvious solution is for housing that is priced in the $220-300,000 bracket.
The problem is that’s not possible. And that is why nobody is coming up with solutions. Read more »
One of Len Brown’s catch-cries, apart from ‘Meet me in the Ngati Whatua Room’, is that Auckland must have ‘smart growth’.
This he tells us is why we must accept his unitary plan.
The only problem with that is the evidence the world over says otherwise.
In 1950, Florida had only 3 million residents, ranking 20th in population in the country. By the mid-2000s, it boasted about 19 million residents and had moved up to fourth in state population, behind only California, Texas, and New York. Recent years, though, have seen this upward arc broken. Florida was hard hit when its housing bubble burst in 2007—ahead of the national meltdown that triggered the financial crisis and subsequent recession. When its economy imploded in 2008 and 2009—unemployment eventually rose as high as 11.7 percent—Florida, long a haven of opportunity, became a less attractive place to stay in or to move to. The state’s six-decade run of positive annual net domestic migration (that is, more people arriving in the state than leaving it) came to an end.
Florida’s restrictive land-use policies (better known as “smart growth” or “urban containment”) helped inflate its property bubble to massive size, making its bursting all the more economically painful. Such growth policies limit urban expansion, prohibiting new housing except in small sections of already dense metropolitan areas. As Brookings Institution economist Anthony Downs argues, these policies can destroy the competitive supply of land, driving land prices up (other things being equal) as demand rises sharply in relation to supply. These higher prices get passed along to prospective homeowners in higher home costs—often made even pricier by various other regulations and fees. The rapidly escalating housing prices, in turn, create the potential for extraordinary profits for speculators—or property “flippers”—who, jumping into the real-estate market in considerable numbers, increase the excess of demand over supply, driving prices higher still, until a bubble begins to expand. It’s no surprise that markets with more restrictive land-use policies have much greater housing-price volatility, as research by economists Edward Glaeser and Joseph Gyourko has shown. Read more »
Subsidies are evil, they suck cash and they almost never work as intended often distorting the market terribly.
Beware of any politician who thinks subsidies are a solution. Especially for affordable housing.
High-income earners are the overwhelming beneficiaries of government support for housing, a report has found, turning on its head the popular perception that low-income Australians get the greatest subsidies through rent assistance.
”Only 25 per cent of renters get any support from the government,” the cities program director at the Grattan Institute, Jane-Frances Kelly, said. ”They get none of the support that homeowners get. Even landlords get more.”
Oh look, it isn’t the Chinese buying up houses:
First-home buyers priced out of the British market are increasingly looking to buy property in New Zealand, research shows.
Experts here say increased immigration is adding fuel to an already-inflated market, putting a strain on local house hunters.
A study by foreign exchange specialist Moneycorp showed New Zealand was the fifth-most popular place to buy for young Britons, behind the United States, Spain, Australia and France. Italy, South Africa, Portugal, Canada and Brazil rounded out the top 10.
The number of 19 to 28-year-olds using Moneycorp to buy properties abroad has increased fourfold since 2011.
While they may comprise a relatively small slice of the British market, the company said it illustrated a wider trend in the age group.
The number of Britons in their 30s buying abroad had jumped by 25 per cent in three years.
The boom was not reflected among retirees who had traditionally dominated the international property scene. The number of over-69s buying abroad had shrunk by 79 per cent between 2007-2012 as older home owners become reluctant to release their British assets. Read more »
via the tipline
Wonders will never cease…it looks like my reader who sent me in this link has found a world first…an honest real estate agent…who knew they existed?
From reading the listing it looks like this place is rooted and they are telling everyone the all gory details so any buyer will know precisely what they are buying.
The latest NZ Herald headline on building consents says it all. Building Consents slip on dwindling apartment market.
One could make a good cheap hack at Auckland Council. Dwindling apartment market. Yes. Because nobody wants to buy apartments? Perhaps.
Rather than be so black and white one needs to ask why? What is it about apartments that makes for such miserably slow sales at low volumes.
Some would say cost and it is true that comparatively a two bedroom apartment of complying size will cost as much as a new house on the outskirts. In itself that changes the way buyers think.
Others site preferences for houses and land that has long biased the market towards houses.
Whatever the reasons it does appear absurd that nobody actually knows, least of all Auckland Council. Where is the study that would inform Council as to the success of the compact city based on more intensive forms of development like apartments?
The reality is that there is a distinct lack of credibility to plans to compact the city with very particular housing typologies that have a a history of low sales volume and even today ‘dwindle’.
The issue is that there has to be a reason. So what is that reason? Read more »
Policy Parrot says:
Today is a busy day and yet another crazy arsed decision from Auckland Councillors has come to light.
On Wednesday the loonies voted to mandate that all property developments over 15 dwellings must have 10% affordable housing included in them.
This is socialism by stealth.
It is utter madness!
Property developers and developments are not flush with cash. Judging developers by what car they drive on tick is no measure of how flush they are or how profitable their developments are.
If anything the last 5 years ought to have taught us their margins were slight and they were dangerously close to failure which many did.
This idea of affordable housing is absurd because there is simply no way of making a development profitable with the inclusion of heavily discounted dwellings unless:
- margin is eroded to nothing;
- all the other purchasers pay more to subsidise the cheaper units.
It has never worked overseas and it won’t work here. It’s foolish, has not been based on clear evidence it is achievable and it has no place in free market democratic New Zealand.
In fact if implemented as a rule (and providing it isn’t smashed by the lawyers which it will be) developers will simply be forced to work around it and will build developments in stages or of a size that is just below the threshold to avoid triggering the rule.
Purchasers will not pay more knowing that they are subsidising other people. What sane purchaser will go buy an apartment in a building knowing they are subsidising 10% of the dwellings for. Some other schmuck. Read more »
I see Stuff has an article about a rich “Chinese” businessman seeking to buy Mark Hotchin’s now finished mansion on Paritai Drive.
The sale of the Hotchin mansion on Auckland’s upmarket Paritai Drive is expected to be finalised within the next two weeks.
Market speculation is focusing on the family of a prominent Chinese businessman with extensive business interests in this country as the most likely buyer.
Graham Wall, the real estate agent handling the sale of the sprawling clifftop mansion built by former Hanover director Mark Hotchin, said a sale was close.
“Supremely confident is how we’d describe our situation. But we’ve quite a few jumps to get through before before we could say we’ve sold the house,” Wall said. Read more »
Labour has confirmed this morning that they don’t care much for immigrants, especially those from China.
David Shearer has hurriedly announced their new housing policy after David Parker let the cat out of the bag yesterday.
Labour are set to ban foreigners from owning property.
Labour leader David Shearer says New Zealanders are “muggins” in allowing foreigners to buy real estate here and that would be stopped under a Labour Government.
Mr Shearer told TVNZ’s Q+Aprogramme today the policy would put a halt on foreign speculators coming into the housing market and pushing the prices up.
“We’re going to restrict, almost totally, foreign ownership, to buy established houses that are here. Read more »