No Affordable Homes? Rubbish, even Trade Me knows this is tosh

I just received an email from Trade Me about their property listings.

Even they know that it is spurious in the extreme the political sloganeering about affordable homes…as they say in their email there are literally  “thousands of homes under $500,000“.

™-property-affordable

Perhaps political parties might like to stop bullshitting us now over”affordable housing”.

Every week in Auckland on Thursdays and Fridays there are house purchases being settled. Millions of dollars of property are changing hands, every week, proving that housing is affordable to people, just not broken arsed losers who shouldn’t own a house anyway.

 


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  • cows4me

    There was an item on Campbell Live last night about house auctions where homes were auctioned off in just 30 hours of coming on the market. The house auctioned on the item was nothing flash but went for 1.1m which my wife and myself just could not believe. Anyhow what we could also not believe were the amount of willing bidders, it was like a feeding frenzy, with everyone desperate to get that home. I suspect real estate agents and property firms would be very happy to circulate the myth that housing can not be bought for under $500.000, it makes people desperate and forces many into bad choices which they will live to regret.

    • Sea Bear

      Interesting thought that it’s the agents who have created the hype and are driving the price rise. What could happen if agents are forced to have set priced dollars for their sale take rather being based on commission percentage……

      • Hazards001

        Negotiation is the key to most things. I’ve sold houses before and given agents a choice.

        1st choice is: The fee will be (set amount open to negotiation) the fee will include (advertising photos auctioneer if applicable…blah blah..open homes etc) the period of this contract is..(however long they told me it would take to sell open to negotiation)
        2nd choice is: Hit the road jack I’ll find someone else or sell it myself. You don’t have to be enslaved by these pirates.

        • Hazards001

          To be fair that was a while ago but I can’t see what would have changed in the last 7 yrs?

          • Patrick

            Sold two on Trademe a few years back, easy to do & nothing to pay to the leaches.

  • Arran Hunt

    I see these articles of people unable to find a home in Auckland. I wonder if they have ever been told about apartments. I own one, it’s beautiful, no lawn to mow and the easy transport to the central city (a minutes walk). Yet we seem to have this idea that, in our biggest city, people should be able to just step in to a house with land, and apartments don’t appear to be an option.

    • Sir Cullen’s Sidekick

      Another one added to the my rich pricks’ register.

      • Arran Hunt

        How am I a rich prick when I live in an apartment in the city? It actually cost less than most of these people want to spend on a house. And I don’t own it and rent it, I own it and live in it.

        • Sir Cullen’s Sidekick

          “I own it and live in it” – standard definition of a rich prick….case closed.

          • Arran Hunt

            Then I say we encourage more “rich pricks” in this country by freeing up more land for new houses & apartments. The more “rich pricks” who can own the place they live in the better.

          • Sir Cullen’s Sidekick

            Yes, better for PM Sheep and Deputy PM Norman to tax the hell out of you guys….

    • AnonWgtn

      But lawn needed for children when they have one.
      And we must have two car parks, and be in walking distance from our local café, and bar.

  • johnbronkhorst

    These moaners are after a palace in central Auckland, for the price of an outhouse in Ngarawahia.

    • Bingo

    • philbest

      Try “young Kiwis deserve the same prices as young Texans or North Dakotans or Minnesotans”. Farmland is about the same price here as there. Certainly not 60 times as high here. The “60 times” factor is a racket run by the Council central planners and the land bankers.

      • James

        Even if land prices dropped to US mid-west levels houses would be more expensive here due to the rorting by builders and the material suppliers.

        • philbest

          We can do something about that too, but lets not leave out attending to the biggest problem just because there are some smaller ones as well.

      • Mr Sackunkrak

        Never mind Labour Party MP’s who are hoarding properties. If the bastards were honest, they’d be the first to free up some of their holdings for the greater socialist good. I won’t hold my breath. Their policies are “for thee not me”.

        • Mr_V4

          Also the Green party “superannuation scheme”.

        • AnonWgtn

          Helen is an overseas resident and she owns at least four Auckland houses.

    • Sir Cullen’s Sidekick

      Yes, what is wrong with that? Even “Screamin Socialist Cindy” is after one….

      • AnonWgtn

        After one what !!!!!

        • Sir Cullen’s Sidekick

          I will leave it to your imagination…..

  • philbest

    Kiwis need to wake up and spread the message about how housing markets are supposed to work when you don’t have Soviet style central planners stuffing it up.

    Go onto RE sites for any US city that has always rated as “affordable” in the Demographia Reports, and apply a search filter for $80,000 or less.

    You will see pretty much exactly the same standard of houses you are being gouged $500,000 for here.

    Apply a search filter for $250,000 and you will see houses of the standard you are being gouged more than a million for here.

    There is no reason it can’t be done here. It all starts at the urban fringe and being able to cut out central planners and land bankers, and getting farmland for the $10,000 per acre it is actually worth. It ain’t rocket science to work backwards from that, to see the difference it would make firstly to the price of new fringe McMansions, and from thence to all the options across the entire housing market.

    Old fixer upper near the CBD? $1,000,000 is just extortion. Should be and can be, under $200,000.

    • kehua

      Bullshit Phil, the houses anywhere are only what people are prepared and able to pay. Governments do not dictate house prices , buyers do with the assistance of the availability of finance. This is something that Labour and the Greens know only too well buy typically misrepresent the situation at the expense of poor buggers with limited knowledge and experience . They make me sick the bastards. My experience of the USA is only get what you pay for and I doubt very much that US80 K would be that flash.

      • philbest

        “Supply” does not matter? We must try that with bread and milk. Let an oligopoly charge “what people are willing to pay”.

        I am not talking bullshit; only distortions to supply cause housing to be this unaffordable. Otherwise how do you explain absolute shitters in undesirable cities in Pommyland being ridiculous prices? How do you explain that California was affordable for decades even when it was growing twice as fast as Texas is now? You can’t explain this with “desirability” of where people want to live.

        You can’t explain it with “credit” because the USA has dozens of cities that stay affordable regardless of how low interest rates get and how easy credit gets, even while California is bubbling crazily. And South Korea has some of the tightest mortgage credit in the world combined with some of the least affordable housing.

        • Mr_V4

          I do also worry about generalised currency debasement feeding into the cycle, there is a perception (real or not) that money on deposit is going to be a loser in the long run, and housing is seen as ‘safe’ owing to historical returns and the volatility of other markets (shares etc.)

          This is a powerful force which I think can make the market go higher. And despite claims to the contrary by RBNZ etc ways of generating credit will happen in the economy regardless of what is going on on the reg. side.

          Of course the higher it goes, the bigger she will blow.

      • Pissedoffyouth

        “Governments do not dictate house prices , buyers do with the assistance of the availability of finance.”

        You are wrong – local government messing with pure economics is what is causing this – not cheap mortgages

        • justin

          WWF is housing subsidy.
          Interest Free SL is housing subsidy.
          Accomodation Support is housing subsidy.
          Kiwisaver paying for housing is housing subsidy.
          Tax benefits for speculators is housing subsidy.
          Then their local councils with ‘impact fees’ + resource fees… Don’t forget the encouragement of land banking and drip feeding sections/consents
          The housing market is anything but a free market.

    • Sea Bear

      $10, 000 per acre???? Wish I farmed in your area my loan would be half of it current level. We are being ripped off in gisborne by your figures.. no housing demand to speak of and for flat land 40 min out of town budget for around $20, 000 per acre and that’s for stuff that’s not allowed for housing subdivision.

      • philbest

        Yeah, that’s expensive farmland, but farmland at $20,000 per acre will result in $2,500 more expensive quarter acre sections when converted to urban use, in comparison to $10,000 per acre farmland.
        That is not the elusive factor we are looking for to explain why sections of 1/8 of an acre and smaller include a raw land cost component of $150,000 plus. i.e. several hundred thousand dollars per acre.

  • Niko Kloeten

    I’m disappointed Mr Whale. You have done an excellent job in recent months exposing the lunatic planning policies of the Auckland Council and how they are pushing up house prices, yet now you turn around and claim that people who can’t afford homes in Auckland are ‘losers’.

    This is offensive to me and all the many thousands of hard-working, honest people being shut out of the market by the planning racket you have been so adept at exposing.

    Besides the petty name-calling, your comments don’t make sense. Just because people are buying houses doesn’t mean they can afford them. Remember a little thing called the global financial crisis? I bet people were saying the same thing in California or Arizona in 2006, before their epic crashes.

    You consider $500,000 to be affordable? That’s more than six times the median household income. Thank goodness for the Demographia Housing Affordability Surveys, which debunk efforts to shift the goalposts and use bogus measurements of affordability.

    Housing is affordable at three times incomes, no ifs, buts or maybes. Show me the thousands of homes under $200,000 in Auckland and then I’ll take your claims seriously.

    • Col

      Nothing is easy in life, and never has been, if it is a problem just move, very simple, I did best thing I did. Some people have income of $200000.00 a year who CAN live in AUCKLAND others have income that they can’t live in Auckland, the problem everyone wants to live there but some only have a beer income, just move.

    • Pissedoffyouth

      A $500,000 mortgage is affordable – it just isn’t affordable if you don’t want to give up the V8, smokes, town bar beer and Sky

      • philbest

        The size of the principal matters. If you buy a house now in NZ you are a friggin idiot. LEARN from California and Ireland and Spain, why can’t we?

        “House prices can never fall” is the myth that caused the GFC. Not “loose credit”, not Wall Street, not taxation incentives. It will carry on causing disaster in nation after nation until humanity freakin’ LEARNS.

    • philbest

      Yeah, I am disappointed with this site too, when it comes to this subject, it seems it does not attract economically clever people, just the type of right winger that gives “right wing” policies a bad name. Acting as apologists for crony capitalism and rent seeking and zero sum wealth transfers when what the country needs is honest wealth creation and fair opportunity for all.

      If you don’t care about this, you are not a “free market” person at all, or you’re selective, only in favour of free markets when it suits you. A free market in housing can do for housing, what a free market has done for cars and audio and video. If you think the situation in NZ is acceptable, you might as well be in favour of a monopoly supplier of locally assembled Ladas, for all the “free market” advocate you are.

      • Lou

        If somebody is controlling supply and therefore demand – its not a free market. Someday those controls are gonna slip – and BOOM! All comes tumbling down.

        For example – all the Nimby’s on the outskirts of Auckland – stop the incessant resource consents and away we go.

        Not really rocket science now is it!

      • justin

        Phil you are damn right. A genuine good right wing lad. Five merit points for you.

        • philbest

          Kind comment, thank you.

          Trouble is, “right wing” now means so many contradictory things, many of them defined by the Left.

    • AngryTory

      You consider $500,000 to be affordable?

      We consider $5,000,000 to be affordable – to those who deserve to afford them.

      We’re not socialists. Get used to it.

  • Sir Cullen’s Sidekick

    Sorry Whale Bro – “Affordable house” in Sheep’s definition is a 300K, 4 bedroom house with harbour views in the centre of Auckland closer to good schools and transport. If John Key cannot provide this, Sheep will.

    • philbest

      The free market would provide “half the existing houses on the market” at this price if we let it and got rid of all the growth boundary.

      • Sir Cullen’s Sidekick

        Thanks for understanding Sheep’s policy. It is a winner bro.

        • philbest

          Thanks for understanding my argument. Sheep and colleagues are economic geniuses.

        • Ducky

          Yes, I will be voting for Sheep next election! I could get my cuzzie bros to buy up large when those cheep (sheep) house that Sheep built are on sale! 900k will buy me n cuzzs 3 houses and resell them later for a huge profit!! Thanks DSheep!

      • Muffin

        That’s only part of it, you ever built a house? the materials cost is extortionate.

        • philbest

          Increased prices of building materials does not explain median house prices in real terms in NZ cities, doubling between 1999 and 2007, and creeping up somewhat since with a brief flatline.
          The fact that raw land is being sold to developers for more than $1,000,000 per acre on the fringes of Dorkland and not a lot less than this in ChCh and Wgtn, explains a lot of the prevailing prices in the housing market.
          I recall a time when some young people bought used houses off Brittains Building Movers for a few grand, bought a section for a few grand, paid a few grand to get the house moved and connected to services. Total cost was about 1 years income. Try getting a head start by doing that now, with the section alone costing about 5 years wages before you even put anything on it.
          We can do something about the building materials oligopoly but we should not leave dealing with the biggest problem (by a wide margin) just because there are some minor ones as well.
          It often seems to me that the reason so many people have an objection about reform of urban planning, is that they know this actually WILL affect house prices and of course many people do not want that. Therefore they put up vehement arguments that we all we need is a capital gains tax, and all will be well; or we need tougher credit, or we need cheaper building materials. They very likely do so because they know these policies WON’T bring the prices down, or at least not by much.

          • Muffin

            I don’t disagree with you, but we brought outside Auckland. 145k, 5 acres. But the cost to build gets inflated with so much shit, that you don’t need. Sill tape and special building paper are two that come to mind. Expanding foam around windows is another, it all adds up big time.

          • philbest

            The reality is that if Fletchers could whack 40 houses on that 5 acres, they would be very affordable. They won’t be able to, because for 5 acres to be that price, it has to be zoned “rural” or lifestyle blocks.
            It’s still more expensive than pure farmland, but not a deal breaker for housing affordability. A raw land cost of $30,000 per acre is $3000 per house at 10 to the acre, which is typical today. So not a lot different to $1,000 per house if the land had been $10,000 per acre. The problem we are really faced with is that the land zoned for actual “housing” within the growth boundary, captures its oligopoly owners a cool $1,000,000 odd per acre.
            Actually, it is more complex than this, because half the land in a development is never saleable sections anyway. Some of it has to be roads, footpaths, green space, rights of way, play areas, public facilities, etc. So this means $30,000 per acre land, results in a $6,000 raw land cost per house, at 1/10 of an acre per section.
            $1,000,000 per acre land cost translates into $200,000 raw land cost for each 1/10 of an acre.
            Seriously, you don’t have to know much more than this to understand why sections are so dam cheap at and beyond the fringes of cities in the US that do not have a growth boundary…..!
            It also helps that “infrastructure fees” are not front-loaded into new section and house prices. There always was a sound moral reason to pay this back in local taxes, that we seem to have forgotten.

          • Muffin

            Yeah if it was a good ground, flat 5 acres. Truth is to add even 4 more sites would cost 4-500k in development. So not so straight forward.

          • philbest

            This raises another point about the effect of urban growth boundaries on housing affordability.
            In cities without a UGB, the land that is least suitable for building on is simply leapfrogged and perhaps kept as parks and reserves and other uses.
            But a UGB forces developers to spend a lot of money putting uneconomic sites to use. And even dangerous sites.
            The recently built suburbs in ChCh that liquified in their earthquakes, had been known for decades to be a risk and had remained undeveloped. But eventually, the “compact city” ideology trumped the known risk.
            A country like NZ with the geography its got, needs to accept that its cities CAN’T be as compact as idealists would prefer. Look at Auckland already – compare it on Google earth to other comparable cities around the world. It’s about as dense as you can fairly expect it ever to be, already. Among “new world” cities, only Toronto is denser. Half the cities in Europe with 1 million people, are less dense. Every city in France except Paris, is less dense than Auckland.
            And generally, the denser cities have advantages of flat and stable terrain.

          • Lou

            Wait – that is way too factual! The fat cats have to make a $ somehow! Selling land, houses, building materials and reselling others labour – way to go mate. If you are not on that train – sorry for you.

            Now if someone does a study at who is sell,ing who is buying and what the mark-ups are – then we can get a clearer picture.

    • Steve (North Shore)

      Plus local cafes when you are not out having dinner with the family.
      Dinner in the City is a must, but lunch at Catolina Cafe on Sunday shall not be missed

    • Mr_V4

      Sir Cullen, now you tell me! I thought affordable housing was bunking down with Annette? And I thought getting a free Swiss Ball was a good deal …

      • Patrick

        Better pack a butt plug if you are intending a sleep over at Annette’s with your swiss ball. Otherwise there could be a rather unfortunate pain in your rear when you awaken. You would go from a Mr_V4 to a full blown V8 roaring down the street ala the last unfortunate that chose to sleep over at Annette’s.

  • Tony

    There are lots of options if one is willing to be less picky. Apartments is an option. You can buy 75sqm plus two bedroom apartments in Eden Terrace for really cheap. Well under $400k. Some need a tart up. Most are excellent buying.

    • LabTested

      I have a 60sqm two bed apartment 500m from the beach. In a complex of 10 with a swimming pool 3 meters from my back door. It is in a nice town in Spain & cost me 60K euro (NZ$100K) 3 years ago and has dropped in value since

      When not using it I rent it out as holiday lets & it nets 10% easy

      • Mediaan

        Is there a nice town in Spain? Wish I knew where. I seem to find the other sort.

    • AnonWgtn

      Not enough car parks and too far from our favourite bar and café.

  • Big hitter

    I earn $170,000 and I wouldn’t pay the prices for a house people are who clearly earn much less than I do. A mortgage on a $700k dwelling would use up 55% of my after tax income. Only a complete muppet would take on a mortgage so large they can’t live life because they have no money left.
    The market deserves to be spanked if it ever crashes.

  • Mediaan

    These grumpy greens and their sullen pink friends, they love to find something to whinge about.

    Me, I bought a liveable and almost tidy house (quarter acre almost, lovely elevated section with glorious view, carpeted, heavy iron coal range) a couple of years ago on Trade Me for $40,000.

    Step outside the main cities if you want a cheap house.

    • jaundiced

      where’d you get the 40K home?

      • Mediaan

        Hills of Southland 1.5 hours from from Queenstown.

        No jobs down there, but lots of people carry a benefit round with them.

        • jaundiced

          nice

    • philbest

      You can get 40K homes in Detroit too. Presumably the potential for local employment is similar.

  • AnonWgtn

    Can somebody please tell me where are the qualified builders to build 10,000 additional new cheap homes per annum.
    That is completed 28 houses per day for a 365 year (no holidays or weekends).
    Or 38 per day for 52 x 5 day working week with no holidays.
    My local tradesmen will not work at weekend as they have their boats to go snapper fishing, as it their right.
    A tradesman will charge $85 call out fee during the week and double outside that time, and that is only to look.
    When will these socialist get real – although that in itself is unrealistic.

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