Auckland could be on the verge of another housing crisis as the recent surge of immigration-driven population growth outstrips the supply of new homes being built in the region.
The latest figures from Statistics NZ show Auckland's population grew 47,000 in the 12 months to June this year, mainly driven by high levels of international immigration.
Auckland has an estimated average household occupancy of three people per dwelling, so an extra 47,000 people would, on average, require an additional 15,667 homes to house them all.
However the latest Auckland Council figures show the number of new dwellings completed in the 12 months to June this year fell just short of that at 15,263, leaving a shortfall of 404 homes for the year.
Although the shortfall of homes is not large, it is significant, because it is a reversal of the trends over the last few years when low levels of immigration and high levels of residential building saw the supply of new homes in Auckland exceeding demand from population growth.
The Statistics NZ figures show that over the three years from June 2018 to June 2021, Auckland's population increased by 49,900, or an average of just 16,633 a year, largely due to immigration coming to an almost complete standstill following the introduction of Covid-related travel restrictions.
To satisfy that population growth, an additional 16,663 new homes would have been required over that three year period, but Auckland Council figures show that 34,554 homes were actually completed, more than twice as many as required to handle the increase in population, giving a surplus of 17,921 homes over the three years.
In the following 12 months from June 2021 to June 2022 that trend was even more dramatic. Auckland's population over the 12 months went into reverse and actually declined by 12,400, leading to a reduction in demand for new homes of 4133.
But residential construction in the region continued to increase and 12,900 new homes were completed in the year to June last year, giving a surplus of supply over demand of 17,033 homes for the year.
That means over the four years from June 2018 to June 2021, the supply of new homes in Auckland exceeded the demand created by population growth by just under 35,000 homes.
However that situation reversed completely over the the following 12 months as the government reopened the immigration floodgates, largely in response to employers' calls for more overseas labour.
Up until March last year the number of people arriving in New Zealand on work visas was just a few hundred a month, but that started rising rapidly from April last year, passing 10,000 a month in September last year.
In the month of September this year, just under 20,000 people arrived in the country on work visas, with Auckland likely to be the most popular destination.
But at the same time, residential construction in Auckland has peaked and is expected to steadily decline over the next couple of years.
Those trends meant that over the 12 months to June this year, Auckland's population increased by 47,000 people, requiring an additional 15,667 homes.
But only 15,263 new homes were built. leaving a shortfall of 404 homes for the year.
That suggests the Auckland housing market is at a turning point where immigration-driven demand starts to outstrip supply, which could see a return of the housing shortages that plagued the region prior to 2020.
It could also see pressures rising on the infrastructure required for new housing such as water, sewerage and electricity supply and on other public services such as transport, health and education.
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143 Comments
We love scoring own goals in this country. Self inflicted and preventable
Not an own goal if you own a house and are set to benefit from the increase in prices (ignoring the social consequences of a large chunk of the population having no hope of ever owning a home).
That only stands to benefit those who own multiple homes, so is still an own-goal for the country at large.
Makes life worse for ~95% of the population. Sadly, that 5% that benefit are overrepresented in media and politics so the narrative tends to be quite different to reality.
At best, for the rest of us it makes it a little easier to take on more debt - so easier to make yourself poorer in the long run. Hurray.
Weasel cunning of Labour. Bring in a Dunedin on the sly, with no mandate, to root the incoming government.
"Labour has left behind political landmines - problems that are going to explode. The biggest issue is that immigration is greater than the country can absorb.
Stats NZ reports that New Zealand had a record net migration gain of 110,200 in the year to August, almost the population of Dunedin. It is impossible to provide the houses, hospitals, schools and roads that an extra 110,200 people a year require.
Mass immigration is increasing the size of the economy but at the expense of increased homelessness, waiting times in A&E, traffic gridlock and our quality of life. Unless the new Government stops importing truck drivers and waiters and gets 110,200 able-bodied adults off Jobseeker and into work, it will lose the next election."
https://www.nzherald.co.nz/business/richard-prebble-labours-landmines-m…
This opening up of immigration is down to political pressure from lobby groups that are typically more aligned to National than Labour (Federated Farmers, Business lobby groups).
It's fine to blame Labour but the only difference if National had been in power would have been the gates would have been opened earlier so not sure what your point is.
Massive cheap labour immigration is part of the well signalled NACT game plan, will you be as quick to criticise them if they don't put a hold on it? I mean they could send a very clear signal to Immigration NZ to stop allowing visas until the new government is formed if they wanted but they will not because this is what they want.
Massive cheap labour immigration is part of the well signalled NACT game plan, will you be as quick to criticise them if they don't put a hold on it? Yes. Having two immigrants arrive for every birth is insane.
I spoke to a couple of property managers yesterday, rental demand going crazy and prices on the up. When will we learn.
Getting close, $400 per room per week, wifi not included.
Around $650 for an old cold 3bdrm in Nelson bay currently. Shipping containers selling like hotcakes
Apparently, the rental housing market in Auckland is going gang-busters......
Not what we'd expect for this time of the year.
Anyone know what the situation is in Wellington??
TTP
Evidentially, there are on average 38,000 gang-busting reasons why it's cheaper to rent than own.
https://www.interest.co.nz/personal-finance/124362/bnz-chief-economist-…
It's only a matter of time before overcrowded houses and homelessness become global media fodder. It's an embarrassment of our choosing.
Just spoke to someone moving from a 720pw to 850pw rental in wellsford. I literally gasped
Poppy you should consider selling your overpriced, under-performing, low-returning house. Invest the funds in TDs and save vast sums by renting while making a killing in yield
You must be gasping to post comments like these. I'm certainly picking up more thinly veiled venom in your posts of late and I'm not even a "Boomer".
Well done, you've just self validated why you should consider selling your heavily mortgaged Papamoa rental....
Did that comment strike a nerve. I'm so sorry
Not at all 😊
You're the entertainment....
Too many people living too close together = friction= conflict=anger= action - politicians should reflect we know were you live.
George Gregan: 4 more years mate, 4 more years
Labour played roulette with the economy, now the supply of homes is in the dumps.
Along with Councils who don't approve housing developments, are causing grief tomjones_04
PS: If you could spend those 35 upvotes you'd have some very nice big boys toys
What can I say flying high... I'm popular. I'm also blessed with film star good looks.. what am I supposed to do?
National will hardly make it better. They were the ones saying we needed more migrants, they are removing interest deduction and brightline, they are preventing density, they won’t invest in proper transport in cities. Labour were terrible, National will make that look good.
100%. I don't get people criticising Labour for certain failures when National and ACT are quite openly proposing to make those same failures worse...
It's like voting for someone to kick you in the balls because you didn't like the other guy blowing raspberries in your face.
Yeah what does removing tax deductibility do, reducing the brightline period, making it easier to borrow money. It allows the leveraged to buy more and ramp up the prices by providing an environment that FHB can't compete with. Wonder why Luxon would do this?
This explains why he wants prices to go up, its like insider trading at the highest level.
From NZherald in 2021 below, really easy to find
"National Party leader Christopher Luxon made on-paper gains of at least $4.34 million from his property portfolio in the past year.
That is about 15 times more than he will earn a year as leader of the National Party.
The salary for Luxon's new job is $296,007.
Luxon's seven properties include his Auckland home in Remuera, a bach on Waiheke island, and an apartment in Wellington."
Its like an echo chamber. But hey that's OK cause some people do not like smiley whites. It's like NZ property has become a large casino, if you have a house, then the house always wins. Hard to get on that first rung. But hey suck eggs if you were not able to buy 5 to 20 years ago.
Looking at such a short window and trying to draw conclusions like this is not very meaningful.
Over the next few years there will be changes in demographics that will be a key driver too. Boomers selling bigger housing and going go to smaller ones. As Boomers die their kids are going to sell their rentals too.
The only good thing is that if it really turns to shit we might see some changes to encourage utilisation like in Victoria recently.
Still a long way away from the Boomers dying off. The oldest one is 77 years old - only 2 years past being old enough to qualify for entry to a retirement village. The youngest is 58 years. Also, once you reach 65 your life expectancy is 87-89 years of age.
Real life experience - in my street of approx 15 houses 80-90% are occupied by people 65+.
Around 8 of those the male partner is already deceased (many boomer demographic - early onset of cancer), another 2 and they are single males in their 80’s-90’s who lost their wives). Only a couple of working age couples/families (perhaps 2-3 of the 15 or so houses in the street). Literally my current residence is surrounded directly (within stones throw) by 6 widowed females who are only just getting by in houses that are much too large for them (all single females around 70 living in 3-4 bedroom homes).
In the next 10 years it is likely they will all need to sell and downsize as the current 3-4 bedroom homes they are occupying on 500+ Sqm sections are too big to manage for them (as a working age male Im often asked to do maintenance/repairs for them as they are unable to do so themselves).
It is going to be a real/material issue in the very near future.
I personally wouldn’t downplay the demographic impacts coming our way very soon/happening right now. As I point to above, there is a good chance 80% of the stock in my current street will need to be sold to (or rented by somebody younger) than the current occupants. So where are all these people going to come from - overseas or from under bridges/out of parents garages? Or will these houses be empty when they try to move/need to move into the Summerset village?
This is what is causing unnecessary urban sprawl and huge traffic issues - a massive reluctance for boomers and elderly to down size.
All these homes should be filled with young families with easy commuting distance to work, creating an active thriving family community. But no - boomers gotta boom. They give everyone a massive middle finger and just stay put. The one silver lining is the kids *should* just sell these houses asap, along with the rentals that they need to liquidate.
Instead the boomers expect young families to have 1hr to 1.5hr commutes just to be able to afford a similar home.
Some of the like to have spare rooms so family can stay with them. Don't think that's unreasonable.
Boomers got a boom? Are you 12, you sound like a whiny tiktok influencer? If you want to live in a particular area then buy a house in that area at market price. If you can't afford it then take your whiny a$$ out to the suburbs.
The people you are so condescending about almost certainly contributed more than you have.
Triggered much?
If boomers paid a capital gains tax on their massive property value gains over the last 40 years - then yes they would have contributed more. But no, they didn't even pay enough tax to fund their own superannuation.
Now the young generations are left with massive govt debt to deal with along with trying to raise a family when housing affordability has never been worse. The Boomers (AKA: The Me Me ME Generation) are doing their best to give all their accumulated wealth to big corporations (retirement villages) rather than their family.
The housing market is broken. Due to lax borrowing rules- there should be DTI's in place, the family home should not have been allowed to leverage equity.
The home building market is broken due to NIMBY's (me me me gen) shutting down any density growth where it's needed.
The Boomers will sell their big family homes over the next 10-20 years to Millennials who are looking to upsize. The Millennial generation is actually much larger than the Baby Boomer generation, so there are plenty of them (currently aged 27-42 years of age). The idea that there will be a surplus of homes due to Boomers dying/downsizing is a myth, as the new generations are much larger
But much poorer. Hard to think they will be selling all those houses to millennials for millions.
This is going to be where the rubber meets the road in the coming demographic downsize.
Who is going to buy all these over priced family homes and beach baches to fund the retirement village (and associated funds) profits?
I'd expect developers to buy them, knock the houses down and squeeze 20 townhouses on for the steady flow of immigrants to inhabit.
The Millennial generation is actually much larger than the Baby Boomer generation
Do you have any factual evidence to support this claim? Genuinely interested as the baby boomers parents, on average, had larger families.
Someone needs to explain to me why boomers dying off is going to fix anything. I mean people are dying all the time right ? Its not going to change a thing while the world population continues to increase and we can suddenly have 100,000 extra people here in only 12 months.
The boomer demographic were a big post war bulge, they make up a much bigger proportion of the population than they should. But yes when we import 100k a year it’s all meaningless.
We also need to look at the quality not just quantity, many much maligned boomers are still working productivley interesting to see if millenials are a productive and inventive.
They are too busy food prepping and manifesting for the week ahead Rumpole.
The flawed fundamentals that have allowed Auckland house prices to reach as high as 12.5 times median household income, dropping to a still unaffordable 10.2 times and increasing again is so historically baked into the underlying price of the land that it will be almost impossible for it to unwind without a crash.
The rest of NZ still has the same flawed fundamentals but that hasn't gotten too far out of hand that a manageable recovery to a lower more stable median income might still be possible via better land use policies to prevent speculative growth and the overinflated value can then be eaten away with wage increases and inflation..
Auckland should be ringfenced and left to rot on the vine.
Many cities have real estate that is unaffordable, especially in safe, prosperous places with a decent climate. Even London which only has 1 of the 3 has plenty of suburbs (eg Kensington - Phillimore Gardens average house 45m NZD)that have average house prices even more out of whack than Auckland. Even commuter belt towns with decent rail link to the city are for the uber wealthy (eg Gerrrards Cross). Auckland will never catch up with the likes of London but many of the central suburbs will continue to defy domestic fundamentals for the same reasons as parts of London, Paris etc
Was the 1 of 3 climate because London is superior to Auckland in that regard?
Id argue with a straight face that London's climate is better than Auckland's
If you see better as snow in the winters and the odd heatwave in the summers with high humidity causing all sorts of issues, then yes.
And you don’t see the sun for 9 months. We see the sun almost every day in Auckland in amongst all the rain.
The sun every day in Auckland, pull the other one JJ. London has had amazing summers the last few times I was there, winter is great up until Jan and then I'm told it's a grind until spring. THey don't have the relentless rain and wind Auckland does. They are really well set up for the cold as well, with central heating and loads of pubs with fires in winter. I'd rather a few days of snow than wind and rain non-stop.
If unaffordability was a precursor and measure to a place's safety, prosperity, and decent climate, then Hong Kong at 18 plus median income would be twice as safe, twice as prosperous, and twice the decent climate of Auckland.
None of these things are fundamentals as to why a city is affordable or not.
As all the theory and practice have shown since Adam Smith's time, it is land use policies that dictate the affordability baseline.
In jurisdictions where they have land use policies that are reactive to demand in developer real-time, then immigration supply has very little effect on causing prices to increase.
London is a financial powerhouse which has had global companies for 100's of years. It has been the hub of everything the British empire has been a part of. The same applies to Paris etc. Not to mention they are all part of Europe.
What has Auckland been a part of financially, where is it based, arse end of the world, not great for global companies. Weather, smeather, it's all about money. That's why property is expensive. We don't have incomes for our property, we dont have true wealth. Our immigrants are mainly table coordinators, fuel technicians and coffee grinders.
London is a financial powerhouse which has had global companies for 100's of years.
It was a powerhouse for trade and currently the housing market and financial sector does the bulk f the work for London in keeping the money flowing. If the financial sector actually bailed on London as it was thought it might due to Brexit, then there would be mass downstream effects on the local economy there.
When you say "household income" it doesn't look or sound as bad.
It's worse because household income used to mean just the income of the one working partner.
Thus approx. 50 to 100% more income is needed, yet house prices have gone from 3x median income to 7x in the regions and 10 to 12x in Auckland since the early 1990s.
Was my point. We've effectively gone from 3 x median income to 14 x median income, when talking about an hourly Labour basis.
Same issue in all major in demand cities around the world.
Need to get out mate
The fact that we don't tax uninhabited dwellings adds hugely to any current/futue housing shortage in Auckland. Drive around the wealthier parts of Auckland at night and witness the number of houses without lights on. Its shocking in some areas with +30% of dwellings being empty.
If people are wealthy enough to buy a property and keep it empty then they can afford a 5%/yr tax on the CV of that property. An easy win passed over by the do-a-lot but do-nothing Labour Government.
Drive around the wealthier parts of Auckland at night and witness the number of houses without lights on.
How do you know they aren't just watching movies in their home cinemas, out at business dinners, or just meeting up with friends?
I’m with Hulk on this, walking the dog regularly you can tell which houses are long term empty and which ones aren’t (without being a stalker!)- it is definitely an issue but very hard to do anything about. Even finding some of the owners would be harder than you’d think
Tell that to the statistics @refactornz - you sound like Jacinda....
https://www.newshub.co.nz/home/politics/2021/08/jacinda-ardern-not-conv…
Thanks for the video to remind me how f-ugly she is
This comment says an awful lot more about you than about her.
I dont want to see her horse teeth ever again and I dare say that winnie peters agrees after the conniving and subterfuge she/her treated him to.
No comment about Winnie's looks? Why the double standard?
Completely irrelevant to the point, but what's not to like. You're obviously fighting the dame's corner. I cant see liebour returning to power until all of the existing mps have retired or resigned à la Kiri Allen
Let's keep it informative and intellectual, regardless of your opinion which many may agree with and many not, we're here to stimulate thought.
Pompous much
No comment about Winnie's looks? Why the double standard?
That's just pathetic. How can a grown adult be like that and say that on this site.
Shove off. Why do some people think that increasing the government's tax take, and therefore wastage, is the solution? Recent events, like refusing to let domestic property developers claim all their costs against their taxable profit have shown how dumb that theory is.
On a related note, another dumb thing cropping up all over NZ is the local bodies refusing to charge developers their costs involved in doing their bit to get the development done. Why has this happened all over the place? Check the debts owing by local bodies all over NZ. Some have no long term debt, some have ridiculous amounts, with very little to show for their debt levels. The only reason for this to happen is because of gross dishonesty, and/or gross incompetence on the parts of the councillors, and the operatives they employ, from the chief executive down. When we eventually retire, it will be to a low debt local body. Clutha District, with a good, decent,good hearted, proper mayor and staff, is probably the financially best, at this stage
5%/year! Gosh that is high. A $1m property would be 50k. Not going to happen.
In Pennsylvania the LVT is 1.5% per year which is one of the highest in the world. It means that houses are cheaper but also rents are astronomical. Think $4000us a month for a suburban 3 bdrm. It is arguably more difficult for FHBs to save. The underclass who will always rent are screwed especially.
Doesn't the LVT pay for education/schools as well? Maybe other council functions such as the local police?
I think we should tax people giving birth. that will solve all problems.
if we have a problem, we tax it.
Unironically kind of yes. Tax things you want less of, and reduce tax on things you want more of. We always complain about a productivity issue in NZ. Yet we continue to load the majority of the tax burden on income taxes which directly disincentivise working and employment. We also added a tax directly on trade with GST, which directly disincentivises trade which is GDP. And yet we took tax off land when land tax is the one thing that improves productivity by disincentivising inefficient and unproductive landholdings, pressurising landholders into action one way or another. Poor incentives around landholding are what is destroying this country.
Agreed. All vacant homes/AirBNB properties should be hit was a minimum $50k tax per year (excluding holiday towns/baches etc).
That would quick smart add about ~5% inventory, if not more, to the long-term rental pool or a whole lot of houses for sale will flood the market. Which would also be a great result for society.
Politicians are terrified of pissing off boomers - as they determine the election outcome. Politicians also, by in large, own secondary dwellings so they don't want to actually fix the housing market, as they will stand to lose 100's of thousands of dollars.
Politicians are terrified of pissing off boomers - as they determine the election outcome
Herein lies a fundamental flaw in our society. What is good for some is no longer good for all, or most in fact. Remember to provide for some we borrow from the future generations in terms of energy, thus robbing them of opportunity. Do you see any new houses built off heart rimu anymore? The once great Kauri forests of old are all but lumbered and milled, much of which get's thrown away as old tables etc.
Rates are taxes and apply to property irrespective of occupation, if you want to penalise owners for doing something you do not approve of I have some interesting additions to your idea but you may not like them when they apply to you..
So you car and caravan is sitting vacant on the street. Does the same apply
The government needs to build more housing for rent only. So many people living in overcrowded conditions or cars, many places in Auckland are turning into slum area’s with more crime and social unrest. Landlords are able to rent out houses at ridiculous price’s making it hard for working families to pay rent, many now need three or four incomes earners in house to be able to afford rent.
They have needed to do this for many years, they have all proved themselves incapable of doing anything but supporting the status quo. The government at every level needs a massive injection of youth to shake them up.
Make it more fun to build for people who want to build for people who need this type of housing. Make it more fun for people who want to own and rent out such properties. Make it less fun for people who refuse to be good tenants. Problem solved. Now watch everybody concerned who can possibly put such situations in place, point blank refuse to do it. No wonder we have so little respect for all our national and local government elected and salaried operatives.
Market solutions have failed miserably, everyone except those who stand to benefit can see that. Let me guess which category you fall into.
Seen it on train to work, you see sleepouts on sides of houses.
2% more users. 0% more infrastructure.
This + inflation means the futur looks worse than the present = doom and gloom. It literally means a drop in living standards for the vast majority of people.
Our overlords who are doing this (on purpose for whatever reason) have a lot to answer for.
Honestly, who is in charge of this country and why is this happening?
Worse than 0% more infrastructure, at the current rate of decline of our roads I will need a 4x4 to get to work soon and I live in a city!
Limit AirBNB to 60 nights a year and watch the number of properties available for rent skyrocket.
Air BnB should not be allowed in suburbia at all. It is another big problem that gets no airtime.
The Queenstown council tried to outlaw airbnb and failed. Apparently in the NZ legislative framework, if you want to stop short term rentals it needs to be in the certificate of title.
They manage AirBNBs far better overseas in places like Palm Springs. They just need to tax them and rate the commercially. No need to ban them.
The problem with places like Queenstown is that the Labour Govt basically outlawed renting out holiday homes. So homes that could have been provided for 3-9 months a year over summer or the ski season are now only legally able to be rented out via AirBnB or they have to be left empty. This should correct once National reintroduce the no cause eviction laws, so that you can rent a property for 6 months to seasonal workers and then have them leave so you can use your house for the other 6 months.
Possibly but that then creates other issues. If we want to become a nation of renters, those renters need security that they can't just be turfed out at any time. They have this protection in other countries where much of the population rents.
It turns out that the sort of people who own such properties are more likely to vote in local body elections. The sort of tenants who want long term reasonably priced housing, are not so likely. Therefore who's friends get elected. The top council operatives are also far more likely to be owners of one or more properties than be tenants as well. Our last local body elections showed all candidates who were anti AirBnb were not elected. Quite simple. Classic democracy at work. As a result, we all have high profit low risk AirBnbs instead of low profit longtermers with grossly protected tenants! As a result all sorts of businesses are providing accommodation for their staff. Just like the old days. Think Bournville, totally owned by the Cadbury family. Think all those English villages, all owned by the local lord. The villages historically only existed to provide housing for his workers.
Anyone who wants things to change, has to work within the bounds of a "vibrant, liberal democracy".
Air BnB should not be allowed in suburbia at all
I disagree on that. There's a real lack of hotels/motels in suburbia and mostly they're not suitable for families. Why should the only options be city centres, remote campsites, or sleeping on someone's couch?
Maybe , but they at least need to be rated commercially and maybe an AirBNB tax. But accommodation for normal living should also be a priority.
Why should short term rentals be rated commercially when the use is the same and the demand on public services less.
Sorry - but the needs of a family or anyone to live somewhere for 365 days of year is going to trump the wants of another family, who want to have a cheaper holiday for 14 days of the year, 100% of the time.
Short term rentals should be taxed (Tax in this instance isn't a money grab but rather a deterrent). And they should be taxed a lot.
Short-term rentals already are taxed, at marginal income tax rates.
Pretty sure that this is common practice overseas. Especially in areas where housing for normal living is limited.
Not necessarily so, regarding restricting Air BnBs and having a flood of rentals. We have left a rental empty for the last 18mths, as one of our adult children lived there and moved overseas. We did not let the property, as it is now more difficult to move problem tenants on, and they can have pets even if the rental agreement states no pets.
I don't thing you could legally stop Air BnB/ short-term lets. You could lease to an individual/ business with the option to sublet. This entity could then houses clients/ Air BnB tenants. In a Western capitalist society you can restrict development. But, it is difficult to restrict an individuals use of their asset, if said asset is used legally, ie to let as shelter. The less government involvement, in law abiding citizens day to day activities, the better in my book.
Imagine them having pets. Bastards.
Dogs were domesticated 33000 years ago, and have co existed with humans since. Time to put a stop to this madness.
Air BnBs have been stopped/limited overseas. https://www.investopedia.com/articles/investing/083115/top-cities-where-airbnb-legal-or-illegal.asp . No doubt there would be a general uproar from the airbnbers if they had to be licenced and limited.
Ah the sweet irony of owning spare property and keeping it empty cos of the “hassle”, while your children flee the country most likely due to the crushing costs of living.
Perhaps a higher occupancy than 3 should be applied. Where we live, a few recent tenancies are for Indian people living 4-5 pax per 2 or 3 bedroom townhouse.
Assume 3.5 and it doesn’t look quite as bad.
But yes, it’s the overall trend which is key.
And if we are talking overall trends, will these pressures continue to build? With a weakening economy, with weakness in some of the key sectors within which recent immigrants are working, will there be the same demand for labour, and hence for so many immigrants?
My view is immigration levels will trend down significantly in 2024, but so will dwelling completions. The net result? A little bit of a supply deficiency, but not major. And therefore only minor-moderate impacts on house prices and rents.
I don’t think calculating occupancy is the way forward. I believe we need to make the asset class less favourable and put some handbrakes in place. I generally don’t mind how people invest their money but when the system is so skewed to making easy gains/ stacking up multiple properties AND we have such big issues with demand and supply I think there needs to me some measures put in place.
When there is a housing shortage, disincentivising those who supply housing is not the way to go. Labour's term has demonstrated that.
By in large slumlords/property speculators/investors don't create new housing. In fact 70% of investment properties are existing homes. Only 30% of investment properties are new builds. It should be the other way round.
...and the interest deductibility rules Labour brought in were a neat, in unconventional, incentive to bring that about. Make existing properties completely uneconomical for highly leveraged investors and they will build instead, and/or sell some properties to reduce leverage.
Brand new homes rent for more than older homes. So all that happened is that low income families lost their cheap 3-4 bedroom rental, and for the same rent, could only afford to rent a brand new 2 bedroom townhouse. If they were a 6 person family then they became homeless. Thats why the public housing waitlist quintupled under Labour.
In my area an older 2 bedroom unit rents for $450 a week (but there are very few of these on the market now), while a new 2 bedroom townhouse (of which there are dozens) rents for $550 a week. All that Labour did for renters was push their rents up by $100 a week.
Why couldn't the low income family afford to own the cheap rental? Address this and much of the home ownership that all governments talk about is solved.
But many landlords/investors seem to be in it for the long term capital gains, which they will usually get on existing older homes with larger pieces of land. As long as the rent covers their costs of owning the property, many seem to be happy. Yet they don't usually get taxed on those capital gains which IMO is ridiculous .
Best you do a bit of research. A large proportion of Western European people live in renters. Every one of these renters are owned by ridiculously big owners, with hundreds and thousands of such properties. They all seem to get by. Limiting numbers is no answer. Forcing people to behave themselves is the trick. Central government,councils, developers, owners, and of course tenants have to be forced to learn this.
Housemouse - I thought there was heaps of townhouses hitting the market from your observations, you were acting like there would be a mass surplus available with no one to rent them?
Where are these places? We are ready to jump if the situation is right.
I never said there would be a ‘mass surplus’. My point was that a lot of new townhouses were hitting the market, and that will help to address the high levels of demand.
If you go to TradeMe and search townhouses in Auckland for rent, you can see for yourself the large numbers of new builds for rent.
Hahaha well put. HM is always banging about the surge in rental listings
And….what’s your point?
ABSURD.
The productivity commission told government to put a population strategy in place. This has been ignored.
I have constantly argued for a population strategy aimed at maximising wellbeing per capita which balances off economic, social and environmental benefits and costs per capita.
Yes we are literally making NZ living conditions worse by doing this (on purpose).
#dumb
Why wasn't it even an election topic at the debates?
Because they are all complicit in the ponzi, including the media who set the questions.
And no one in the media here is interrogating the issue like Macrobusiness is in Aus. It’s pretty shameful.
Because Labour and the Greens have an open border policy, in line with WEF. Anyone who dares suggest we do otherwise is immediately branded a racist. Then they are cancelled from their jobs and social media. People have become scared to put their hand up and say "what about ....?"
And NACT don't? Or is it they'd just prefer selling to the highest bidder?
Immigration has always been the basis of economic theory/capitalism - keep those at the bottom fighting for jobs to keep wages down.
To create jobs you need people consuming, but if the system is unbalanced because everyone is either "investing" or struggling to pay their mortgage/rent, what happens then?
It's only racist if you target race, but it's not based on race, it's based on skills and migration numbers.
People have become scared to put their hand up and say "what about ....?"
This culture was allowed to be fostered and grow under the last Labour Govt. Can verify from personal experience and many friends working in different departments, you had to tow the line and if you pushed back with rational debate you were seen as confrontational and this limited your chances of obtaining a better role in the same department. Hopefully we see this change ASAP as it was a morally and democratically corrosive mentality and culture.
Interesting comments fro German Chancellor on forcible repatriation of illegal immigrants - following questions of if Germany still had any large scale facilities to tempoarily house illegals.
October net passenger numbers to date - an influx of 58,518 people. Higher than even the post border opening last year. Still 6 days to go.
Do we have enough dairies and booze outlets for all of these immigrants to run?
There's always vape stores.
Been to Queenstown lately - haven’t met a local working there - it’s nearly all foreigners running the local services. From haircut to tourist activity to hotel - not a single local was encountered.
I guess this makes sense to an extent for such a place (as Q’town) but it will become so transient in nature and doesn’t build a society or sense of community ie the things that improve living conditions for an area.
The community soul in Q is dead.
My friend use to live there bricklayer, became too expensive, lives in Dunedin now, he's doing very well.
You forgot the fish and chip shops.
When did the previous housing crisis end? This is also self inflicted, because who made the decision to open the floodgates, if there weren't enough houses to house them in. Plus we need to add in the demand they place on health system, schools, electricity network , the list goes on. Noone seems to be accountable. What population should NZ actually have and are we planning for that growth. No
Let's not forget the large numbers of rental sold to people who bought them as owner occupiers 2020-2022 at inflated prices, thus reducing the rental pool across the country and placing greater demand on state housing and growing the already flourishing emergency housing market.
It's a New Zealand tradition that every new government inherits a housing crisis. However we are eventually going to have to stop calling it a "crisis" and accept that this situation has become a norm. We are not a nation of industrious builders any more.
Immigration Visas in Australia used to contain location conditions preventing new migrants from staying in cities and encouraging them into the regions. Might be time for NZ to consider doing something like this in the future. Affordable housing is still a huge issue in this country and a major contributor to the reason why skilled Kiwis move overseas.
But the problem is that costs are often higher in the regions, due essentially less services. Eg rates are often higher, as is food and fuel. Health system can be worse etc. They need to put more money into the regions to encourage people into them, to take the load off the cities
Agreed, infrastructure planmningg needs to focus on satellite cities such as Ashburton, Timaru, Blenheim (could be satellite of Wellington as well as Kapiti and the lower Wairarapa), any many outside of Auckland. Start focusing on public transport for starters (looking at you Christchurch and Auckland) making it more appealing to live in satellite towns.
Already happenning - Selwyn fastest growth are in country
We currently have an immigration system that doesnt even require immigrants to have a job, let alone anything else. This is what has opened the floodgates - people being trafficked into the country in return for tens of thousands of dollars paid for visas to overseas agents with kickbacks to employers.
Pretty sure Winston was very against this and the high immigration inflow back in 2017. Will be interesting to see how he reacts once the final election numbers are in. A sad state when NZs future seems to be dependent on this.
Remember the National govt in their last couple of years changed the criteria so that migrants get more points towards gaining residency if they lived outside of Auckland? That has had a real effect and I’m convinced that’s why prices outside of Auckland started booming circa 2016
If only supply and demand metrics were actually this simple. If there was such an over supply why was there not a drastic reduction in prices? In most cases of products and services the supply comes first and demand is created via various means. Why does this not happen with housing?
It would appear in reality most people (suppliers and purchasers) are in fact just demanding more money, more "wealth". Take it further and it can easily be suggested that one is unconsciously also demanding more homelessness, more unaffordability, more social unrest etc.
It would seem we have an extremely flawed narrative. Rentier and finance capitalism is not wealth creation, it is wealth extraction. In fact our entire economic belief system operates this way. Real wealth is a healthy ecosystem, healthy communities and healthy people. Goods and services are mere utilities. How is it we've been led to place more value on bells and whistles, baubles and trinkets, scarcity over abundance?
Wise words, and some that central and local government could take heed of instead of focusing on growth metrics and comparing NZ to other countries constantly to make sure we're not 'falling behind'
If there was such an over supply why was there not a drastic reduction in prices?
Our high inflation rate masked the extent of the falls. We had house price falls of 15% during two years when the rate of inflation averaged 6%, means the value of houses declined by more than 25% relative.
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