By Gareth Vaughan
I thought this was going to be the housing election. But it hasn't quite transpired that way.
Immediately after her ascent to Labour's leadership one of Jacinda Ardern's key messages was that we needed affordable housing. For someone living in Auckland this was encouraging and appeared to me the key area where the opposition should attack the government of nine years.
However, as the campaign unfolded housing has not received the airtime it deserved. In the final TVNZ leaders' debate on Wednesday night housing only got a mention in the context of what impact Labour's desire to ban foreign house buyers would have on free trade agreements.
A key factor in housing struggling for oxygen was Ardern's naive decision to suggest Labour might introduce unspecified tax changes recommended by a tax working group during a first term in government. This opened the door to attacks from a grateful National who kicked the door down with what was, at times, scare mongering Rob Muldoon would've been proud of.
Thus National was setting the agenda and Ardern was forced on the defensive against a government seeking a fourth term. Ultimately she back flipped, farmers protested over water tax, and the issue of housing affordability struggled for attention.
Meanwhile as the chart from S&P Global Ratings below demonstrates, both NZ real house prices, and price to income ratios, remain very high by international standards.
According to the Real Estate Institute of New Zealand, the median Auckland house price during August was $840,000. Thus based on the median Auckland household income for 25-29 year-olds, the Auckland median house price to median household income multiple for this age group is running at 10x. For 30-34 year-olds it's running at 9x. And for 35-39 year-olds it's running at 8x.
As my colleague Greg Ninness recently pointed out, house prices have risen at nearly 10 times the pace of wages for typical first home buyers in Auckland over the last four years. Our latest interest.co.nz Home Loan Affordability Report shows in August mortgage payments would have eaten up 42.6% of a typical Auckland first home buyer's take home pay.
English & Ardern grilled on Radio NZ
Radio NZ and its Nine to Noon host Kathryn Ryan deserve credit for keeping the housing conversation going. As written up by Alex Tarrant here and here, Ryan grilled both English and Ardern on housing this week. The two interviews demonstrated that both National and Labour's housing policies need more scrutiny.
Ardern stuck to the line that ramping up the building rates of more affordable housing through Labour’s KiwiBuild policy, assuming the workers could be found to do this, wouldn't see the values of existing houses drop. And English defended National's record including subsidies for first home buyers and its focus on supply, which has failed as new builds lag well behind population growth. (There's more on Auckland's housing shortage from interest.co.nz here and from S&P here).
Aside from proving an all-important place for people to live, housing dissects other key areas too. There's health of course, with much spoken and written about the health impacts and costs of cold and damp housing. Then there's education and the impact on children whose renter parents are forced to move house several times with the kids bouncing around between schools.
Over the past couple of years we've seen the growth of what I call sticking plaster solutions. These include the first home buyer subsidies, increasing use of taxpayers' money on homeless shelters, and putting those needing emergency housing up in motels. By one measure NZ now has the worst homeless rate in the OECD.
What about demand?
Obviously the key solution is building more houses. There are ongoing land supply and council consenting issues to be overcome, and greater densification is required. But also demand must be acknowledged as an issue too. The August year net migration gain of 72,072 is equivalent to about 1.5% of NZ's population. With the lion's share settling in Auckland, that's a whole lot of new people who need somewhere to live, arriving in a city that's already bursting at the seams.
Yet, like housing, immigration also hasn't received the airtime it should have during the election campaign. That's even though it has been broadly acknowledged that our housing, health system, schools and roads are struggling to cope due to population growth and in some cases under-funding. (There's also the issue of the quality of skills many migrants are bringing to NZ as David Hargreaves covered here, and Wellington economist and former Reserve Bank staffer Michael Reddell covers in his Croaking Cassandra blog).
Time to declare war
Recently I interviewed University of Auckland senior lecturer in economics Ryan Greenaway-McGrevy. He argues our politicians must declare a war on house prices in Auckland and do what it takes to make Auckland housing affordable. That's because given NZ's lacklustre productivity growth wages are simply not going to rise fast enough to make housing affordable in our biggest city.
As Greenaway-McGrevy I believe correctly argues, it’s hard to understate the importance of restoring housing affordability to Auckland. Cities are productive places, the engine room of the modern economy. High property prices discourage people from moving to Auckland from within NZ, and firms find it difficult to attract staff when they try to expand. Companies also lose employees as bright young workers move away in search of a reasonably priced home.
But with ex-Greens co-leader Metiria Turei the only party leader brave enough to say house prices need to fall, I won't be holding my breath for dramatic change whoever is able to form a government after Saturday night. That means housing affordability, or lack thereof, is likely to be an issue - especially for our young people and especially in Auckland - for years to come.
99 Comments
The simple answer is that neither of the major parties know what to do about it. And those with houses or residential portfolios don't want anything to upset the apple cart, further stymying any required political innovation. Thus, for this election at least (and apart from TOP's focus on the issue), those on the sharp end of this social iniquity don't have a substantial political voice. It'll come, though, and forcefully, as the increasing numbers locked-out and renting turn against living in insecurity and dependency, and drive a new and sweeping political movement on their behalf. What do they have to lose?
... I agree 100 % ... given the limp and ill-thought out " solutions " to the housing bubble offered by both Labour & the Gnats , they appear to be largely ignorant about the how's and why's of the current situation , and what the real cures are ...
Sit Wild Bill and Jacinda Adorn down in a room , a weekend lock-up with any three luminaries ( Hugh Pavletich / Oliver Hartwich / Sammy-bill Equab ) .. and they'd exit on Monday much much wiser ...
... sigh ... never going to happen .... SIGH !
... he's a family man , and a real nice bloke ... even though he is an economist ...
And he bought a house in Orc Land recently ... despite the fact that his name doesn't sound the slightest bit like it's Chinese ...
... amazing fellow ... oh ... and he knows 100 or 1000 times more about the housing situation in Godzone than anyone in Hard Labour or the Gnats do ...
Well, I disagree ... his social economic ideas are full of holes just like many like him who he kept insisting that their economical theories are better suited today's society - talk talk and no substance ... his big mouth about housing and renting for life got him in hot water when he bought a house ...a hypocrite which dawned on him of late that house ownership is more than financial security and family stability .... He is a theorist with no feet on the ground ... He fooled few of us in the beginning but he turned out to be another emperor wearing weird clothes !!
Eco Bird,
Once again, you start cheeping about stuff you know nothing about.
"He is a theorist with no feet on the ground"
Equab is not a theorist. Far from it.
See for yourself. To me it looks like he very much has his feet on the ground.
https://www.linkedin.com/in/eaqub/
lol, ..."you start cheeping about stuff you know nothing about.".... yeah whatever mate,
my CV and experience is 4 times longer than this . ... Dont get fooled with that kind of BS in LinkedIn ....
I have seen and watched him dribble a lot ...... used to impress me at start, then his true colors and impracticality exposed his hollow ideas and views when he wrote Generation Rent ( hence my comment : he is a theorist no feet on the ground) ...
just like most novice economist who try to cover their emptiness by dazzling people and talking ideals through few complicated and compounded sentences most wouldn't be able to resolve and could mean anything and nothing at the same time ... he might get some credibility back when he starts talking sense and logic again !!
Wonder why he left NZIER if he was such a sharp analyst, to become a commentator and a consultant ?
I agree. I think he's a lightweight.
Very little of his work shows genuine novel insight. 'Generation Rent' borrowed heavily on Edward Glaeser's work from the USA.
He has recently been promoting 'Inclusionary Zoning' for housing affordability. The international evidence shows that at best this approach has trivial benefit, and at worst quite negative impacts on housing supply. I don't know how an economist can promote a policy with such weak evidence base in support.
he also seems ultra sensitive - almost offended - on the idea of reducing immigration / foreign speculation to address the demand / supply imbalance.
He also gets over emotive.
Don't rate him.
For the record Equab is from Bangladesh. He has been saying for a number of years it made no economic sense to buy a home of your own and that people should invest in something more productive. He just used the wrong formula to come to that conclusion. The Nats have said much the same. Both are wrong. Equab must have figured he was wrong, the evidence being he purchased. The Nats taxed and encouraged the banks to discourage residential investments. They have been successful in helping our economy to do well. But what sort of Government wants their citizens to be poorly housed. The dropping home ownership ratio is not restricted to NZ. This is a world wide issue we just have to put up with by enabling the people with the money to house those without. Stop the supply of new rentals and you end up with people on the street. This is not war it is society working together for our mutual benefit.
House prices at 10 times average wage are a result of the so called free market. Current crisis in Auckland is only a crisis for middle to low income Kiwis. If you had the balls a deposit and started way back property investment has been a bonanza. Who really benefits from house inflation the people lending the money. Most Investors can’t invest in property if they can’t rent it, that’s why the Government have backed away from supplying social housing a great way to take the heat of the current market. Investors like to believe they are providing homes for hard working families, when all they are doing is pushing up prices so banks make more and first home buyers are shut out of a very unfree market. are providing home for hard working familys when all they are doing is pushing up prices so banks make more and first home byers are shut out of a very unfree market.
In other words, it's not going to go away in the next three years - and probably never.
In relation to asset prices, not according to Robert Shiller. However, that is somewhat supported by Thomas Piketty to describe recent history.
I think you're right there. I also wonder if there's just a little bit of the pollies hoping for some kind of EVENT that will fix it for them so they can roll out the "beyond our control" line.
Any politician who understands well about the impacts of burst bubbles will realize that they will be in the firing line and the sheeple will be lining up for people to blame.
Why has it faded as an election issue? (assuming it really has), I'll take a crack Gareth.
Perhaps because it's a complex problem. Very complex.
Perhaps because the problem was constructed by poor regulatory choices over three decades.
You can only make so much political hay by restating the problem over and over again. Sooner or later you have to explain what you are going to actually *DO* about it. And prove how exactly your solutions will solve the problem.
In an election campaign where personality trumps policy by quite the margin, trying to explain detailed solutions to complex problems is to wade into political swamp land.
Ipso facto, no intelligent politician did it.
I actually second your thoughts Ralph ... the problem is indeed very complex and has many prongs and is well rooted for any poly ( no matter how wide his/her smile is) to solve it by few simple lines and a positive vision ... the opposition parties tried to portray that there is a quick and easy solution for it to lure voters on this highly charged sentimental issue. I would also say that the focus has only been on the low end of FHB ( for obvious political reasons) when these represent only about 20% of the market at any given time - housing affordability has got equality worse for everyone else albeit in smaller multiple numbers, however at the end of the day a buyer will pay his deposit in $$s not multiples !
Only A balanced and careful long term approach should be taken to leverage between the existing financial interest of current owners, the bureaucracy managing the building processes, finance availability, encouraging private sector to build and invest, proactive repair and replace HNZ ( state) houses, Government program to build affordable units for (most) FHBs, the economical implications on general business activity supported by residential properties as collaterals, availability of builders, and many other factors ...
I would suggest that Gov should focus on building smaller and more affordable units ( be it townhouses or Apartments) and leave the bigger more expensive houses to the private sector and market forces to set their prices through S&D .. both are equally needed, but the smaller ones are needed more urgently and maybe even need to be subsidised to make them more affordable (a wise government should set money aside for such an important social investment).
This issue will not go away next term ... if all went well, we should be getting some positive results by 2020 ...
"The do nothing policy will ensure that the issue worsens." - wrong on at least 2 counts.
- (even) nominal prices are falling already ; real prices are falling faster of course.
- doing nothing is superior to doing something silly - and the Nats are not doing "nothing" - althought I agree that they are not doing enough.
If Labour gets in, house prices will rise again.
Labour governments have always ushered in a resurgence of house price inflation.
If we end up with a Labour/Green (unholy) alliance, then anything could happen. My bet is the inevitable economic instability will lead to an increase in demand for (the security of) property - so house prices could well take off big time.
The housing question is really a urbanisation spatial economics problem. Building a house in the middle of nowhere is not hard. But it is hard in NZ to build a house in a city near where employment and businesses opportunities are. NZ has not got the right systems in place regarding -zoning, transport, infrastructure, congestion, car parking requirements, intensification...... to take advantage of this opportunity. Over the last 30 years we have made too many policy mistakes.
I wrote about the economics of this and it was 5000 words long -good luck to any politician wanting to explain all of that to the public in one go. Politicians follow public debate -not lead it -especially when they know another politician can suck all oxygen out of public discourse by the simple action of shamelessly making a series of outrageous lies.
https://medium.com/land-buildings-identity-and-values/successful-cities…
I could have written more about demand side factors. The supply side solutions are large long term investments -they are a kind of birth gift to all New Zealander's. NZ being small and other places being large means this gift can easily be swamped by foreign investment and excessive immigration.So I think a case can be made to limit foreign investment and immigration so that the spatial economics of our cities are not overwhelmed. Again another hard case to make publicly.
I think there is a huge opportunity wrt productivity in getting urbanisation right. Again not something really discussed in NZ. For instance, Interest.co.nz weren't interested in this article on urbanisation and productivity I sent them a few weeks ago.
https://medium.com/land-buildings-identity-and-values/does-new-zealand-…
How would our cities look like in a carbon-neutral world? I think NZ's natural resources and the new technology coming through make that a real transformative possibility over the next 20-30 years. But NZ seems to be intent on doing the same thing, over and over again and being surprised that results are not changing.
I agree with you. The problem is not isolated to NZ either. In Sydney the great paying jobs are almost all in the east whilst the only affordable housing is way out west.
Over 1 million people commute from west to east and back again as a result. They have been furiously build infrastructure in PPP for almost 20 years now, to the extent one of the many hidden taxes is the cost of tolls getting in and out of the city. No major route left that doesn't have tolls now.
Decades of regulatory failure have left the city hugely time expensive to live in. Okay if you are 23, hopeless with three kids in the suburbs you don't see each day until they are asleep.
And the same as it is here, there is no political capital in fixing any of the core drivers. Still easier to promote vertical living, blame foreigners and hold endless witch hunts over public transport.
The recent Unitary Plan was a failure of momentous proportions. The Council's ineptitude and underhand dealings got the Boomers offside and Auckland lost the opportunity to promote good intensification in the Eastern Suburbs that everyone could enjoy/benefit from. What I'm seeing now is house enlargement that will make subsequent intensification uneconomic for decades to come.
What Auckland city council needs to do urgently is to REPLACE all the Old farts who have a finger or a say in urban development and replace them with new honest and clever young planners ... cannot teach an old dog new tricks !! ... nothing will change fast as long as we have log heads in charge
Not true - Auckland has an extremely innovative and fresh approach to urban planning.
Our council decided to add land to Warkworth et al, creating a new type of city - a city with lots of big gaps in it. It is a fascinating approach, spend $billions opening massive areas of land to sprawl and then to have all of it disconnected. The ethos seemingly - the bigger the sprawl and further away the sprawl the better.
A city plan ethos that has never been tried before anywhere, is being created in Auckland.
Ralph,
I wish that I had more than one thumb to give to your post!
What really annoys me are the politicians that state that they are wanting to improve housing affordability, but state at the same time that they do not wish to have the housing prices decline. Sheer sophistry. I enjoyed the interchange on RNZ with Ardern and Ryan, where Ryan attempted to make this point, that improving home affordability in a meaningful way requires a reduction in house prices. There were some aspects of that discussion that were cringe worthy.
If any politician comes out with a statement that house prices are too high and that they need to be reigned in, I'd gladly support that politician. Unfortunately this is a "third rail" issue here in NZ.
What they mean and want is for people to borrow more, but at lower interest rates, that is why we have declining interest rates forced down since 2008....
If Interest rates ever rise, it will be totally un-affordable for all those all ready borrowed to the hilt, using equity as leverage to the next property speculation...and even putting the car on the mortgage...too.
Capital Gains forever, only works one way....
Cannot have that in reverse....can we...? MP's would go Bust......see below.
Probably because the MPs have their snouts so deep in the housing trough http://www.stuff.co.nz/national/politics/92409698/the-many-houses-of-ou…
Apathy and self interest have likely something to do with the issue of housing affordability not being discussed by political candidates. As for the media, the MSM such as Fairfax will be in a tangle considering the RE industry is key revenue source for their business model. Finally, it should be clearly obvious by now that bubbles are never really taken that seriously on the way up. It's only their aftermath that people really take any notice and politicians become genuinely concerned and react to the situation.
Jacinda showed extreme political naivety in halting Kelvin Davis when he first hit back at the Gnats ... she wanted a purely optimistic Pollyannistic happy happy campaign ... poor deluded wee soul ...
... the bovver boys amongst the Gnats have had a field day since , a free run , with no opposition ...
Had Jacinda allowed Kelvin and Robbo a chance to attack back , they could have hollered loud and long at Wild Bill and the lads that they're liars ...
... 'cos , the $ 11.7 Billion " hole " in Labour's budget is a lie ... the Gnats are lying ... Wild Bill is lying , and sticking to the lie .. because he knows Jacinda has voluntarily spiked her side's guns ..
GBH,
I struggled with the concept of a hole in Labours budget. What caught me off guard are the assumptions that Labour used for future growth in revenues and GDP in regards to developing their budget. The next three years will have a GDP that will increase by an average of 4.5%??? Really??? I'm certainly not an economist so I cannot state whether a failure to realize this rather unlikely increase will affect their budget. I can frankly state that their assumption of an annual increase in tax take of 5% per year is equally unlikely unless one proposes some rather large tax increases. What would happen with their budget plans if GDP increases by the expected 3% or less per annum, and that the tax take increases by the same amount as the GDP increases? These would be the rational and expected budget assumptions. Making unlikely assumptions on both growth and tax take will lead to unlikely results in the available expenditures. One should go to the Labour website and look at their fiscal forecast values to personally validate the GDP and tax take values that I used above. Sadly, far too many people use what they read on whatever "news" site as the gospel truth instead of actually doing the maths.
MP's, particularly the Nats have no interest in slowing house price growth:
MPs are making a killing buying up large in New Zealand's overheated property market. Their penchant for property investment has been laid bare in the latest publication of MPs' Pecuniary Interests - registering a 52 per cent leap in the number of properties our elected representatives declared an ownership stake since 2008.
Between them, 116 of our MPs own or have an interest in 302 properties and more than three quarters boast a portfolio of anywhere between two and 12 properties.
If there was a magic bullet to stop rampant house prices it would already have been fired. Anyone who thinks that government has absolute control over house prices is naïve. The matter is complex though National are doing the right things including working with the bureaucratic Auckland Council (aligned for ages with Labour).
There are plenty of things the government could do: decrease immigration, decrease regulation, build houses itself. Its really not that complex. None of those 'bullet's have been fired because National's Economic 'Plan' revolves around immigration and high house prices.
Housing affordability in Auckland is not an election issue, because it is Auckland Council (not the government) jacking up Auckland house prices. The mess could be solved any day by Auckland Council doing its job.
If Auckland Council were to suddenly lift its level of competency to the dizzying heights of below average...
If Auckland Council could stop spending $billions on building massive exurbs miles away from Auckland...
If Phil Goff could do anything helpful ever...
Don't place so much emphasis on the Youth vote.
I had the pleasure of voting at one of the University polling stations just yesterday and the sentiment wasn't necessarily for change (from what I saw).
In the long line of what I can only explain as idiots was the sentiment that National has been the best government NZ has ever had.
The youth are not so much as self interested as the older generation, but they are incredibly impressionable and very amateurish at forming their own educated opinions (the NZ education system doesn't promote this).
The only was this election will be a success is if TOP get >5%.
Well, I bet that if they were saying something else like vote TOP, or praising Jacinda you wouldn't have called them Idiots would you ?? ....
"The youth are not so much as self interested as the older generation, but they are incredibly impressionable and very amateurish at forming their own educated opinions " Oh, you mean they cannot be Fooled or Bribed easily ?? ...
lol, sounds like Democracy doesn't suit you well !!...
And much more important to ALL NZers rather than a specific portion of the society .. labour wanted a hot potato to cling on and blow it out of proportion hanging everything they wanted to pass under that mantra ( housing affordability and houses for all) which apparently did Not work because it was too obvious !!
Hilarious.
The National government has just demonstrated over 9 years exactly how to inflate a property bubble!
And the PM cashed in less than 6 months following his resignation.
The reality is that governments can control it on the way up but not on the way down - pay attention to John Key - and sell.
.. and Labour demonstrated that over the preceding 9 ( actually a bit more price inflation over their 9 years ) . Is it not striking that both parties have been equally ineffective when it comes to controlling housing market ?
BTW I do agree that John Key is probably fairly good at timing the market - but it does not imply that he ( one anyone else ) can control it .
So reduction of immigration by 50,000 and saying DTIs of 4 times with no foreign buyers of property. So this wouldnt control the market. Well if this doesnt control the market, be good to implement it and see what happens. Not put your finger in the air like National does and hope things change.
"DTIs of 4 times" - do that and hear the screams of "FHBs being locked out of the market for the benefit of the RICH !!!!"
"No foreign buyers" - try to actually enforce that.
Reduce immigration - and watch the economy suffer.
You cannot just implement half-baked suggestions to see what happens .. the cures you are suggesting would be worse than the disease.
Why?
In the UK DTI that I had for my mortgage was 3.4. We dont need all these immigrants, Im sure we can drive trucks, pick fruit, serve people in restaurants.
Anyway you said nothing a government could do to bring down house prices. I think there are lots of ways to bring down house prices. Maybe we need to go cold turkey to fix up the mess National have created.
"DTIs of 4 times" - do that and hear the screams of "FHBs being locked out of the market for the benefit of the RICH !!!!"
That logic doesnt make sense. If house prices come down then DTIs of 4 times are achievable for FHB. Not 10 times. The rich cant buy up all housing stock in NZ so house prices will drop.
I would not go as far as saying "nothing" - just nothing quick or easy , or particularly decisive ; the government only has limited influence it this area.
As to your point about DTI restrictions and complaints about them - of course it is not logical - but it is exactly what you would get - witness the reaction to LVRs .
Is it the LVRs or is it the money control on the Chinese.
Anecdotally and by the bbq conversations there are less Chinese in the market after the crackdown. Plus I think more of the LVR response if the LVR is having that impact.
I come from Waiuku and house prices of some properties is 800-900k thats nuts for a town out in the Wops, when you compare it to some house prices in Surrey UK, where I had been living. Thats a 30 min train ride to the centre of London with over 8 million people.
Hi Kate,
Didn't Labour try to grab attention with its proposed Capital Gains Tax? Or was I hearing voices in the air?
And when it became apparent that the proposed CGT was ill-conceived and hadn't been properly thought through by Labour, then suddenly the plug was pulled.......
As it transpired, Labour's "policy-on-the-hoof" approach to the election wasn't going to fool the thinking public.
Well, I think we have seen a fair and clean campaign from both sides ...and thanks to Jacinda's ethics and leadership in muzzling up the Union Pitbulls, the whole campaign went smoothly and focus on issues instead of personal attacks ... you might call it lying, but that was actually a legitimate viewpoint and different calculations and design of budgets or taxation philosophy ...which BTW labour couldn't defend other than calling it a lie ... which did not hold too much water ....
Thank God, it is over !!!
Policies that encourage private home ownership and discourage specuvestors can surely be put in place. Such investment controls can be set and adjusted at rates that preclude overly rapid adjustments but do encourage transfer of housing investments into truly productive enterprises.
Make me PM, I can fix the housing crisis. I suggest that all non citizens can only purchase a property in NZ after residing and working in this country for 10 years (that should sort the wheat from the chaff) together with a reduction of immigration, increase the bright line test to 5 years, not including the family home (that should stop speculation and flipping but not hurt real landlords) and provide subsidies and/or some sort of tax relief for anyone building a new home not just FHB's (purely for my own self interest). See not so hard :)
Because somehow that scum that some call property investors seem to have the ear of the media and the government, and the world would come to an absolute end if any one of them lost as much as $5 on the price of their property, this country really has become nothing more than a joke.
Could be because most of the population don't live in Auckland and Qtown. If you want to live in those places, prepare to get an eye watering mortgage to live in an overpriced cross leased unit. Don't have any spare money to travel or have fun. It annoys me that there is an expectation that the rest of the country should subsidise the housing bubble in those two places by somehow helping people into first homes there. They are like international cities, London or Sydney. Most New Zealanders can't afford to move there even if they wanted to. Most jobs are paid the same whether you are in the regions or Auckland, so why live there? Great schools in the regions and much superior lifestyles. No idea why families on average wages try to live there. Eventually the govt will need to supply apartments for essential workers in those high priced areas . They could also move more govt depts to the regions.
No idea why families on average wages try to live there.
Those I know ask themselves the same thing on a daily basis. And the answer is - it's home for many generations of their families, past and present.
Eventually the govt will need to supply apartments for essential workers in those high priced areas.
Scary prospect.
Housing affordability has been an important issue in this election. The problem is that, apart from wishing for more affordable housing, which is of course very good, it is nigh on impossible to actually achieve it. I have been an Architect running my own business for 18 years and I DO UNDERSTAND the real cost of buying land, paying Architects, Engineers, Surveyors, Council etc, buying the materials and then paying all the trades.
In short:
- Land is expensive
- The building code requires houses to be far more performant than 10-20 years ago
- Materials are more expensive
- Professionals (Architects, Engineers, Surveyors, Council etc) are more expensive
- Labour is more expensive on an $/hour basis
- houses are larger than they were 20 years ago
So how is any government actually going to build any house cheaper ?????????????????????????????????
Land doesn't have to be expensive. It's expensive because Auckland Council won't zone any more of it for residential development. They are philosophically opposed to this. Everyone is supposed to live in a small apartment by a railway station.
It also comes down to immigration driving up all the costs. Materials and labour wouldn't be so dear if we weren't trying to build as fast as lizards drinking.
The bits about houses being larger and more performant are right though.
I think the housing crisis is easy to solve. Stop growing the population and the building industry will catch up. Once the building industry catches up prices will come back to whatever the new reality is. Neither major political party want this to happen as they will be blamed for what will be called a recession. Its up to Winston to stop the artificial population growth. No one else has the guts.
Ethnic bloc voting, the enormous number of urbanites with investment property or worried about property taxes, plus the rural vote gave National its slender edge over Labour/Greens. We need a proper debate about population levels, superannuation for migrants, and investment property incentives such as negative gearing and lack of CGT. The TPP clause allowing overseas investors to buy NZ property without even reciprocal rights is insanity. There is some real anger out there and National will have to address that if it can accommodate NZF. My guess is that most NZF voters are motivated by the alarming migration statistics, which could make for an interesting coalition.
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