The housing market is continuing to heat up, with sales last month hitting the highest levels for a May in six years, while the super-hot Auckland market saw a new record high median price of NZ$565,000 achieved.
The Real Estate Institute said 7714 houses sold last month, an increase of 7.5% on May last year. The national median house price increased by NZ$1,500, or 0.4% to NZ$392,000, slightly below the record of NZ$400,000 achieved earlier in the year. See here for REINZ's regional statistics.
Significantly, the REINZ Stratified Housing Price Index, which adjusts for some of the variations in mix that can impact on the median price, is 8.7% higher than May 2012 and increased 0.7% compared with April.
It is this figure that is watched closely by the Reserve Bank, which has expressed concern on numerous occasions about the heating state of the market and potential inflationary impact.
The single area of biggest concern for the RBNZ is Auckland, and according to the Stratified Housing Price Indices, Auckland's prices have rocketed by 14.8% over the past 12 months.
The National, Auckland, Christchurch and Other South Island Stratified Housing Price Indices all hit new record highs in May. The Christchurch Index is up 13.1% and the Other South Island Index up 5.4%.
ASB senior economist Jane Turner said the Auckland and Canterbury housing markets remained undersupplied and this continued to place strong upward pressures on house prices in these regions as demand gradually recovers.
"More concerning, is the lift in house prices outside of these regions, where supply constraints are less of an issue. The acceleration in house price inflation in these areas indicate it is becoming increasingly appropriate for the RBNZ to lift the [Official Cash Rate] from very low levels to ease demand," she said.
"Higher interest rates would provide some offset to stronger income growth and increased household confidence. However, at the minute the RBNZ is reluctant to increase the OCR given the elevated trade-weighted [New Zealand dollar] and low inflation pressures.
"Recent communications from the RBNZ indicate it is strongly considering placing restrictions around growth in high loan-to-value lending. While blocking access to credit might choke off demand in some instances, it is unlikely to have much impact on demand for prospective buyers in strong capital positions, particularly while interest rates remain at very low levels.
"We see the OCR as the most effective tool in reducing housing market pressures. We continue to expect the RBNZ to lift the OCR from March 2014."
The RBNZ is expected to leave interest rates at 2.5%, where they have been since March 2011, when it has its latest review of them tomorrow.
Compared with May 2012 the national median house price increased by NZ$23,000, or 6.2%. Eleven of the 12 regions recorded an increase in the median price. However, some 82% of the increase in the national median price compared to May last year occurred in Auckland and Canterbury/Westland.
Other regions recording new record medians in May were Canterbury/Westland with NZ$360,000 and Nelson/Marlborough posting a new record of NZ$353,625.
Compared with May 2012 Auckland recorded the largest increase in median price, up 13%, followed by Central Otago Lakes with 11.5%, and Canterbury/Westland with 7.5%. Manawatu/Wanganui recorded the only fall, down 0.2%.
REINZ chief executive Helen O’Sullivan, said price levels in Auckland and Canterbury were continuing to have a major impact on the national picture.
"There are too few houses coming to market in the Auckland region creating an imbalance between supply and demand and driving up house prices at both the regional and national level," O'Sullivan said.
"The number of residential properties available for sale is falling back to levels last seen when house prices fell in 2008 - 2009. As we know the low level of new builds is well below trend making little impact on the available stock of residential properties for sale."
Since sales volumes started to rise from their Global Financial Crisis lows at the start of 2011, the annual increase in sales numbers in Auckland has been just over 20%. However, the number of listings in Auckland has increased at a little over 3% per annum since the number of listings stopped falling in July 2011. Adding in new builds via the number of building consents issued only increased the supply by 4% per annum since the low of July 2011.
Auckland's biggest real estate firm Barfoot & Thompson recently reported that its listing levels were at historic lows. QV in releasing its latest real estate figures said there was a "somewhat desperate feel" emerging among buyers.
REINZ's regional figures for Auckland show that median house prices in Waitakere rocketed by 22.2% to NZ$490,000 in the 12 months to May - indicating that buyers are looking further afield in an effort to secure houses.
In the old Auckland City region, the median reached NZ$666,000, up 15.4% in the 12 months to May, while in North Shore City the median price actually eased by NZ$20,000 from April's figure to NZ$660,000. But this is still up 11.9% in the past 12 months.
House price index
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74 Comments
Boatman, you can buy a 3 bedroom detached house in Auckland for $205k freehold:
http://www.realestate.co.nz/1987808
Just that you have to be on the outskirts.
Labour isn't promising houses in Grey Lynn or Remmers at $300k, perhaps try Massey or Takanini...
Although $85k will get you into a leaky leasehold in Parnell:
Bob, if you are at all surprised by that, you surely have not done enough research into Auckland's house price situation.
In reality the only property type which is "unaffordable" is the detached inner suburban house.
Building ghetto boxes isn't going to change that.
What the unitary plan does do by encouraging inner city ghettos and all but banning outer urban development is drive up the price of those outer suburban sections, which in distant places like Takanini are now approaching $200k for pocket handkerchief plots in subdivisions (or the same price as a basic home in the area).
The solution is sensible density, lower development contributions, easier planning and more approriate tax rules to favour development. (Remember developments are essentially taxed at 43% (GST plus company tax), versus no tax for straight investment).
Super high density is just a super dense solution that goes nowhere.
Fascinating statistics.
Auckland strat. median house prices now growing at 15% - with each month the growth rate increasing. At 15% - it is the fastest growth experienced since 2007, and consistent with the growth achieved in mid 2007. With the prevailing trend it is more likely than not we will see growth rates of about 18-19% within the next 5 months.
May also represented a major lift in seasonally adjusted volumes.
The trough preceeding the upturn in the current cycle was around october 2010. The constant and continuing growth in volumes makes this one of the longest lasting upturns since REINZ started recording statistics. The growth has been more gradual than in previous periods, with key drivers often offsetting one another.
But one thing everyone should note is what is about to happen with net mirgration. With Australia rapidly deaccelerating (and in fact - go look at the governments own forecast for mining and energy capex - a 90% reduction from this year to CY2018) - NZ migration to AU will sharply slow and migrants will continue to NZ. Unless gov acts to slow inward migration there will be a large spike similar to the very large one in 2003/2004, or the brief one in late 2009/2010, which will pump up demand and prices.
This could more than offset increases to the OCR.
If AU had not come backward - we were about to see the cresting of the NZ house market. Thanks to strength in the US economy the USD has lifted, which in effect increases imported inflation, and allows the OCR to rise. Further, it increases yields in America which lifts funding costs (evidenced throughs swap rates) for our own banks - which has the dual effect of a higher base rate in the OCR, and funding costs on top of that.
The current upturn has soley been driven low interest rates. Net migration has been negative. THe next upturn, if there is one, will be driven by migration, partially offset by higher interest rates.
The hell scenario is one with high migration, and continued low and unmoving interest rates.
Great that the RBNZ always waits until it is too late to act. The bubble will burst and it will be nasty but that's not going to happen in 2013.
You have nailed it there KS. The RBNZ is asleep at the wheel (again!). The ONLY thing that will control this rampant housing inflation is OCR rises (those macro tools will only have some limited effect, and anyway they seem to go out of their way to say they don't want to use them, which seems beyond nonsensical). Its a re-run of 2003-7 all over again, and I think your immigration analysis is spot on. Throw is a declining NZ$ and imported inflation rearing its head. They have learned nothing. And as they sit on their hands more people are jumping across to fixed from floating to insulate themselves which will make the RBNZ medicine more ineffective when their hand is eventually forced.
KS / Andy
You make some good points. But I think there are some important difference to 2003-2007:
- We are starting from a much higher level in terms of where prices sit relative to incomes
- Net migration gains 2003 -2007 were driven by lots of immigrants with lots of foreign currency converting to lots of NZ dollars. There is not the same currency power at play now, and gains in net migration in the next 1-2 years will be driven more by fewer kiwis migrating to Aus, and perhaps some returning to NZ
- the economy is generally much weaker now than in 2003-2007
As I 've said before I think NZ is at a really interesting / concerning juncture. I don't agree with economists like Tony Alexander who are picking employment to drop fairly rapidly. I think the gains in net migration, driven to a large extent by fewer kiwis migrating, will place real pressure on unemployment. It mightn't go up much more, but it mightn't drop either.
OCR rises might be inevitable. But I don't think that is totally because Reserve Bank is asleep at the wheel. Its just as much because the Govt has been asleep at the wheel. IF they had addressed the housing issue when they needed to back in 2009 when there was a big economic lull, then they could have got the supply side response readied. With the supply side response readied there would be less need to raise the OCR.
So what now, given the Govt's pathetic lack of action? Raise the OCR to dampen the hot housing market, but put at jeopardy the wider economy. Or keep the OCR as is and continue to see housing inflate, which also of course has wider economy impacts?
I agree with some of the sentiment at the latter part of your comment, but disagree with the comments re: migration and affordability.
Net PLT migration (ie the aggregate of outward migration of New Zealanders and foreigners coming into NZ) depends crucially on employment conditions in Australia (NZ conditions matter as well, but much less given wage differentials).
Monthly arrivals (of foreigners) has been pretty consistent since 2010 (and if anything had a noticeable *little* increase over the last 2 months). High house prices put them off, but a lower NZD will help entice them.
However - there has been a very pronounced drop off in departures of NZ'ers - particularly to Australia. Some of this is due to positive economic growth in NZ, but more definitely due to poor prospects in Australia.
Now - and people should understand this - prospects for Kiwi's in Australia are going to deteriorate sharply and swiftly. Australia is about to start on a journey of painful structural changes on the back of an assured drop off in mining and energy capex. This WILL happen and this WILL have an impact on NZ *net* migration, which is likely to impact housing demand and then prices in the absence of any action to cool inward migration to offset less Kiwi's going offshore.
While house prices are no doubt higher than they were in 2007 they are also more affordable than they were then (even if that means they are more overvalued - a conundrum which is possible). As a multiple of income, as measured by the RBNZ, they are cheaper - and the proportion of income going to service the mortgage is also lower - the latter thanks only to low interest rates. Once interest rates start going up - expect house prices to crash if migration flows haven't turned inwards.
Also - we are quite positve on the NZ economy over the next two years. The last 2 years have been okay, which is backward looking The prospects are strong - and you should expect some of the key economic announcements over the next 6 months will be stronger than expected by the RBNZ and market consensus.
Kimy - This last lot of OCR CUTS cost investors and fixed income retirees $6bln - Ok I made the number up but point made hopefully
Kimy you need to get you head out out that debt pile and realise that there are more players and people affected in the economy than just borrowers.
Cart in front of horse kimy....respectfully, 60 finance companies collapsed likely because of below market defined interest rates (risk mispriced) over time.
The mess we have at the moment is the result of free (almost) money, sloshing around wildly, moral hazard, TBTF, etc.....How to remove the punch bowl now? ie: restore market interest rates.
We have a centrally planned interest rate which is messing up price signals.....and as for interest income well this is simply a time preference.....so obviously nobody of their free will would lose money in term deposits....which is the point.
Cheers
Kimy - I think you're totally living in Fairyland with blinders on - Splineman is dead right. We have GDP growth running at 2.5% currently, and expected to be around 3% over the next two years, and yet you think interest rates are too high. You have unemployment falling, business and consumer confidence at or above pre-GFC levels, and yet interest rates are too high for you, In many parts of the Western world, yes its better here but you want to join them, they have NEGATIVE real interest rates - interest rates designed (and central banks actually admit it) to force investors into riskier investments; the stock market, property, bonds (at negative rates), junk bonds etc - do you not think for one moment that its setting up for a major disaster ?
Do you also not think for one moment that the problem might be that the 5 times plus disposal income to property price ratio (7 in Akld) might be the reason that you're needing lower interest rates to keep the property Ponsi scheme going ? And don't give me the supply/demand argument - when property price becomes totally unafforable, supply will not be a problem ! I give you credit for a better understanding on the interest rate subject than MortgageBelt who is always completely away with the fairies, but not much. Sorry to be harsh (not that you'll accept it) but I do wish likeminded people as you would wake up to what's in the process of happening - even if you don't accept it, look at the reality. The RBNZ will try its machoprudential tools, that many of its own economists dont think will work, and then they will use interest rates whether you like it or not. You then die, claiming still to be right, little consolation I would have thought.
By the way NZ's GDP is around $200bln, not $350bln, please get it right because the number is being permeated incorrectly on this site by a few.
Interest rates will never rise again.
Grant A is an undercover e-media evangelist for the banking industry. They try to "prepare" the population for banking directions.
Interest rates will keep falling globally, until we head for a total reset.
Ignore the rate rise predictions - that's been going on for 5 years - trying to lock people into fixed rates. Then they have them locked in with the threat of so-called "break fees".
Big picture?
Inflation under 1%.
Provincial house prices declining.
Little job growth.
Australia about to enter recession.
Eurozone serious problems.
UK recession.
China growth slowing.
USA in a pseudo recovery.
So, a few villas in Remmers selling for 2 million? No reason to choke off any faint glimmer of green shoots.
Think through the generalised impact of OCR rising here to 3.5%?
Which aspect of that list do you do think is not already priced into the current level of interest rates ? Do you understand that is the way markets work ?
Jobs are growing by the way but lets not let facts get in the way of an argument
http://www.scoop.co.nz/stories/PA1305/S00140/hlfs-shows-encouraging-job-growth.htm
http://www.stuff.co.nz/business/industries/8782690/New-Zealand-job-growth-unevenNot that I blame you for it, the opposition don't consider facts important as well, and seemingly rightfully think that NZers are too lazy to know the facts, or check them if they don't.
Apparently everyone wants cheap sprawl houses so obviously the $300K bracket sprawl houses in South Auckland sprawl suburbs must be skyrocketing.... lets look at the REINZ stats... Manurewa area was $357,000 last year now it's $365,000. That's a 2.2% increase. So there's no demand for what the Govt. wants to force on us.
Look at the average price of central suburb apartments Bob...
There's no demand for what the council wants to force on us either...
The only thing people want is what neither the government nor council can provide, that is, detached inner city homes.
Dumpy townhouses and apartment units right now often sell for little more than the land value in prime inner areas. eg in Mt Eden / Epsom a quarter acre with an old villa in a prime street will probably fetch $2m, while the same site next door with 3 barrack block 70s flats will only fetch perhaps $600k each. How exactly does providing more of that kind of infill rubbish solve the problem, when (a) they are horrible and (b) nobody apart from recent migrants really want to live in them?
The real solution involves dissolving the ultra restrictive band of 40,000 state houses that encircle the most desirable parts of Auckland.
Let Shearer build new warm homes for the state in Takanini and Massey and free up the old dumps in Mt Roskill, Orakei, Glen Innes and Onehunga, for private home owners to renovate and redevelop.
Give an example of a 1000sqm site in Mt Eden that has 3 dwellings (townhouses or apartments) worth $600K next door to a $2M villa also on 1000sqm.
You talking about this sort of thing?
http://www.trademe.co.nz/Browse/Listing.aspx?id=601210210 - 1 unit per 100sqm so gets about $4mill of housing on 1000sqm
or this?
http://www.trademe.co.nz/property/residential-property-for-sale/auction-598546416.htm
1 unit per 185sqm so gets 5.4 per quarter acre gives $2.7 mill.
"Infil rubbish"?
No Bobby, I don't mean that sort of thing.
They are small inner city character apartments. But if you did find a quarter acre next door to 145-147 Mt Eden Road you would probably find that a single house on that site would be worth about the $2.7m you suggest. (The nearest I one I can think of which sold recently on Hororeka St was well over $2m). A modest villa on 300m2 about a hundred metres away went for $1.2m over a year ago at an auction I attended.
My point is that these type of units (below) in suburban Epsom sell at around $500-700k.
http://www.trademe.co.nz/property/residential-property-for-sale/auction…
http://www.trademe.co.nz/property/residential-property-for-sale/auction…
In fact a recent sale of a similar property at 25 Queen Mary Ave Epsom was for $610,000. This was one of 3 units on 800m2. 800m2 with a single villa in that street would fetch high $1m's, possibly $2m.
My point is that in most of these desirable addresses where people want to live, the price of the land with the existing homes sitting on them is as high as the price people are prepared to pay for the shoebox infill rubbish built on the same land in the area. So how on earth can you build affordable housing with that sort of economics????????
Shoving up ghetto apartments might be alright for the densely packed brigade recently arrived from their shoeboxes in the Orient. But it will not solve any problem at all in regards solving skyrocketing prices of detached homes!
If there is such demand for this type of housing, why aren't all the sites zoned Res 7 and Res 8, plus all the mixed use land teeming with developers constructing these super desirable apartments?????
In fact I was looking at a site in Arch Hill recently, a relatively flat mixed use zoned site of about 300m2. The price at $600k didn't even attract much interest, and in fact the rundown villa on it was probably more attractive as a do-up than a development, despite the fact potentially 4 apartments could be squeezed on with a land cost of just $150k per unit.
Then look at Res 7 land in Kingsland, an 850m2 site with a good bungalow sold for just the price you expect to house (about $800ish) just a few months ago.
Development land, is cheap as chips in those areas on a per unit basis and no one wants it!!!! The problem isn't just the zoning, and it's certainly not going to improve the situation shoving ghetto blocks into heritage streets of million dollar villas.
You make some propositions with specific reference to Mt Eden:
- Inner suburb aparments are 'ghettos', 'infill rubbish', 'horrible' and no one wants them
- A single dwelling on a central suburb site will have more value than multiple dwellings on the same site.
I look at Trademe apartments in Mt Eden for sale. Listings don't support either of the above propositions.
In traditional logic it only takes one counterexample to prove a proposition false. When you say 'I don't mean that sort of thing' are you saying that only examples that support your preconceived notions are valid?
Bob, you clearly don't understand the Auckland market.
Take a look at the many inner surburban developments constructed over the last 2 decades in dense zones (the terraced style developments). Many of these apartments sell for only similar amounts to what they originally built. For instance freehold 1 bed flats in Blake St were priced at $200,000 in 2000, while 3 bed villas a few metres away in quiet Ponsonby Sts were $300,000. Today those apartments are worth $200,000ish (GVs $145,000) while the villas are now worth $1.1m.
That shows me what is desirable and what isn't.
You completely miss the point that a b&t unit on say 250m2 in Epsom, sells at about $2500/m2 for land ($625k say) while a villa on 500m2 in the same location sells for as much as $3000/m2 ($1.5m) or one on 1/4 acre perhaps $2000-2500/m2 ($2-2.5m).
That tells me that there is no way of creating affordable homes in the area as the land value is actually higher than the finish price of the comparable "affordable" units in the area!!
So obviously any infill property on 250m2 will need to be priced at about $1.2+m just to cover costs. So why rezone property in that area for instensive development??
You probably think 8 units on a quarter acre is a feasible development (ie 1 unit per 125m2). How many have you done at that density??
1 unit per 125m2 (unless the development has undergound parking) is impossible to acheive anything decent on (of size more than 2 bed units) with the required parking and turning.
Now considering that flat 1000m2 sections in the central suburbs are now rare and that if one were available in an average inner area say Sandringham, Mt Albert etc, and that most of the sites rezoned actually are already subdivided or are small, then the average old house available for development is only on say 500m2, but costs $1m. At best 2 reasonable units could be built on that (ie $550k+ raw land cost after dcs, costs etc) or 4 mangey apartments at a raw land cost of $300k ish. That means the new homes are going to be $800k+ for the mangey boxes or $1.2m ish for the small but more reasonable units.
How does replacing $1m houses, with $1.2m ones improve affordibility? Build at a greater density and who wants to live in those ghettos?
As said previously I agree inner freestanding hosues are more desirable than inner suburb terraces/apartments. You seem to be trying to prove that this means central suburb higher density should be banned. I suggest that although less desirable than freestanding houses (which will never get more affordable), they are more desirable than fringe sprawl.
That aside you argue above that higher density produces more expensive houses so should be banned while @2:04 you argue that higher density = cheaper houses so should be banned
You've explained much better in another thread why you're so against zoning changes anywhere near Mt Eden - "We've got one in Mt Eden, a normal villa".
That Mt Eden property is currently Res 1 in a heritage zone and remains in a similar zone in the proposed Unitary Plan.
I absolutely don't think that higher density should be banned (I've subdivided and developed dozens of properties over the years), however the current plan goes far to far, especially in encouraging multi-level apartments.
If you want housing units of say 120m2 (which would be the minimum acceptable space for a family) and you need a good 50m2 of outdoor space, on top of that you require parking for 2 cars then to acheive all that you really need a net of access 200m2 of land in a suburban location at a minimum, and that would be for a tight development. To acheive that you would need 500m2 to build 2 units. Personally I think that size is too tight unless the development is exceptional.
The proposed rules would allow far too dense housing in suburban locations. Simple as that. It's a bad plan, and the people involved in writting it are clearly out of touch with reality.
Well that's bit of a change from all higher density is 'horrible', 'ghettos' which no one wants.
I don't think apartments are particulary suitable for families - because they need to be bigger and so get as expensive as a house. That was councils mistake with PM196 which stopped apartments in Newmarket.
The Unitary Plan suburban terrace/apartment rules require a miniumum site frontage of 25m (site amalgamation required) so the scenario you describe above can't happen. It also removes the 2 park requirement. It has 2.7min stud requirements, minimum room widths and other new controls that mean anything built would have to be even better than those '30's Mt Eden developments above (which I think we agree are fine? - and 1 per 125sqm density). There are enough controls in this zone that nothing would happen in it for 10 years.
We are finding Mixed Use and many CBD zones are loosing density under the UP (height limit might increase but the new has a maximum storeys limit - which is less than existing)
You say "The proposed rules would allow far too dense housing in suburban locations" why? The Mixed House zone at 1/300 is similar to much of Manakau, less than North Shore. It's less than res 7 - So on balance it's only really increasing some Res6 from 1/375 to 1/300 (which it used to be years ago).
The single house zone is the same as Res 5 (low density suburbia).
There is provision of a granny flat rule within the existing bulk of a house which would be fantastic for affordability - probably the best affordability move they could make. It doesn't require a carpark and is invisible. Your Res 1 villa could have a flat in it getting you rent and providing an affordable flat for smeone amongst $2m villas.
As per your futher points everyone can figure out that inner suburb free-standing houses are the most desirable, hence skyrocketing prices. Not debating that. But there is a limited supply of these - there will never be more than there are now. Most people will never be able to afford them (no matter how much they aspire to them - much like they won't win lotto even though they aspire to). The issue is how to provide more affordable housing. The debated options seem to be mostly fringe sprawl (to appease the NIMBIES) or a mix of increased density and fringe sprawl (as per UP).
The skyrocketing prices in inner city suburbs (including apartments) compared with the flat prices in fringe sprawl surely indicate that that central is more desirable than fringe - no?
According to your arguement a free standing house on 1000sqm is worth more than 3 houses on 1000sqm. Clearly if providing affordable housing is the goal 3 houses are better than 1?
Based on a few examples of MU and Res7 sites that haven't been developed up yet you propose that there is no demand for higher density central living. However there are also examples of Res 7 & MU zoned land that are being developed and sold for big money (Okham's one in Grey Lynn for example) - so, again, you can't support a hypothesis on a few examples when there's also counterexamples.
Incidentially Res8 requires notifiction, a plan change and 2000sqm plus. Outside Coucil doing it in PM196 has it actually been used anywhere?
Designed properly in the traditional NZ style, with basic inspaections and occasional minor repair. Yes no leakage can be guaranteed for 40+years. My roof 45 years old and no leaks, its had some tin repalced and needs some tin replacing in the next few years but really thats managable.
A lot of "innocent" ppl did stupid things like not get the properties checked properly, a fool and his money is soon parted as they say.
Now yes I'll agree that there is a lot of blame to be laid at builders door, but thats also a huge professional mis-manage and failure.....if not more so.
regards
A 45 year old roof is probably worth more than a 25 year old roof.
I bought a house with that stupid internal guttering, after getting a professional pre purchase inspection done
I am fortunate in that I paid cash and the cost of remedial work, although extensive, wasn't material to me.
I know of lots of others who bought with a mortgage and who still work, and this has been a life changing issue for them.
Better yet - build state houses elsewhere around the country and move those tenants without permanent employment out of Auckland.
Check out these house and land packages by G J Gardiner;
http://www.trademe.co.nz/Members/Listings.aspx?sort_order=price_asc&member=2572109&v=Gallery
Why doesn't Housing New Zealand replace those 40,000 stand alone state houses with 100,000 new homes of higher density. So a mixture of apartments, terraces and town houses. 40,000 to remain as state housing and the remaining 60,000 to be sold privately.
I am not from Auckland, so not sure if that would be feasible. But usually state housing has a lot of wasted land and are built together. So this plan would allow large blocks of low density housing to be replaced by a comprehensive package of housing and amentities.
That's exactly what the Unitary Plan proposes (if people actually bothered to look at it). The leafy inner suburbs get more heritage protection than they currently have. The cheaper surrounding HCNZ suburbs like Mt Roskill etc. get upzoned.
How people can get upset about the Unitary Plan, then propose that it should instead contain what it already does is a mystery?
I have a problem with increasing density by infilling because I have seen it done so badly in Christchurch. But if you could increase density in larger blocks, like if you turned 10 state houses into a 25 modern terrace houses for example that could be done really well. The problem is that would require either using existing state owned property or compulsory purchasing existing properties.
Brendon if you are in Christchurch, what do you think of the Lindin Grove subdivision as a model to consider...mix density including terrace houses.. its position with mature trees and close to town has made it one of the most successful recent developments in Christchurch.
I haven't been over that side of town for a while, but due to start work near there soon. So will check it out. But what I could make out from the internet was that use to be Sunnyside Hospital land that Ngai Tahu developed into housing.
Also of note is that Northwood that seems to be overtaking Fendalton in property values has an area of terrace housing. So it seems that higher density can be done well.
@Bob , the low house prices in Manurewa are still an affordability issue, simply at that level the buyers find $365k a big ask and the banks think its a big risk .
The truth is that the NZ house market is the only really true free market in NZ and the Auckland prices are a function of supply and demand The price is what Aucklanders or migrants are prepared to pay .
Boatman: Not so sure it is a function of supply and demand. Seems to be no problem with demand. Doesn't seem to be a problem with supply either. The answer lies elsewhere. Read the following link. You were busily engaged in it at the time.
Asian FIFO buyer flys-in, inspects 27 properties in two days. Buys the lot. Flys-out. No haggling. No shortage of supply or demand there.
Headline of this article. Greatest number of house sales recorded for 6 years. Plentiful supply.
Nomura launched the largest IPO of the year (Nomura REIT) and it is down 4.8% out of the gate Read main article - I guess Japanese real estate investors seek relief wherever greater fools pool.
The truth is that the NZ house market is the only really true free market in NZ
Which begs the question are "House prices on fire"
Maybe for certain pockets of Auckland utilising now outdated CPI adjusted valuations, but in national terms the only fire I can see is the one burning a hole in the house owner's' bank account, given that real costs are ahead of real house price inflation. View irrefutable graphic natonal evidence - graph and data analysis courtesy of Colin Riden.
We are now three months into the Treasury forecast period calling for annual 3.9% inflation for the year ending 31 March 2014.
It might be the case that the record inflation adjusted property values seen in certain areas of Auckland may well end up below 2007 levels when June '13 CPI data is released and incorporated into the REINZ data. But that's another graph and one has to ask Colin about it.
Did the goverment score an own goal?
Further investigation of the document you referenced on page 136 of 176, or Section B.3 | 5: reveals Treasury forecasts 3.9% price inflation as the major component of the 6.4% GDPE growth forecast for the March year ending 2014.
From the comment section in Macrobusiness.au where the debate about house prices also rages on
" Most of the western world (esp Europe and the US) got absolutely shafted by having too much private debt tied up in property. Generations of middle-class savings were gifted to the financial aristocrats. The
Finance crooks that were involved in the process that lead to the great recession/GFC got off scott free and are setting themselves up for another go at taking the middle-class savings they didn’t get last time.
The only confidence people can really have is that politicians are liars and usury merchants are self-interested scum."
usury merchants are self-interested scum."
Yep, that's about right - what do we do about it?
Is Joyce after Kiwisaver etc to fund the advancement of others private wealth? Read more
Economic Development Minister Steven Joyce says the Government is looking at the issues around investing government-managed funds in agribusiness innovation.
At a meeting of agribusiness leaders at Waikato University last night on the eve of the National Fieldays, Joyce spoke via satellite from Wellington and responded to audience questions about investing a percentage of the NZ Superannuation Fund into more innovative, high-risk agribusiness development.
Joyce said those discussions needed to address whether it was appropriate for the default funds in Kiwisaver to take a more growth-orientated approach.
"It's a challenging debate though because you're talking about people's Kiwisavers and superannuation funds," he said.
"I think you've got to be a bit cautious but that discussion is ongoing."
Cripes, run for the hills - the greedy have no shame nor "know no bounds".
You say "self interested" as though this is a contemptible trait, found only in the worst sort of people, which ought to be put a stop to. On the contrary. Any system which assumes that most people are not first and foremost self interested, and relies instead on their charity towards the general public, is very unlikely to succeed. Consider the following, courtesy of a rather better writer than I am.
- Every man is, no doubt, by nature, first and principally recommended to his own care; and as he is fitter to take care of himself than of any other person, it is fit and right that it should be so.
- It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.
As for the Joyce comments about KiwiSaver. He is referring to MBIE's ongoing review of the KiwiSaver default arrangements - how to manage KiwiSaver accounts whose owners don't take any interest in them. Should they be managed for low risk or high returns? Yes, ideally everybody would be financially engaged and literate and so make that choice for themselves, but that is not the world we live in.
Ms de Meanour, are you charging me with the responsibilty of making the "self interested" comment or just noting that I was attributing it to another?
In respect of the latter, my response reflected my experience in the not so savoury climate prevailing in my time in the City of London.
I am sure butchers, brewers and bakers meet the higher standards of behaviour you seem to attribute to their actions.
Certes, you aren't the source of the comment, but you did clearly state that you agreed with it. And I was taking issue with the apparent premise that it's bad to be self-interested, and only scummy people are so. Of course some people do bad things out of self-interest, but that is not the same thing at all as saying that self-interest is bad.
Browsing thru' Trademe RE section, you can still buy a reasonable 3br house in Auckland in the 300-400K price bracket. Just that everyone is wanting to live in trendy areas, within walking distance to their favourite cafes.. First home buyers can get what they wanted if they just lower their expectation a little.
http://www.trademe.co.nz/property/residential-property-for-sale/auction…
$380k - 3 bedroom next to a train station - no car needed.
Cant say fairer than that - what housing crisis?
If these house prices are so overvalued, why are banks lending the full amount less the deposit? Are they being professionally valued to get these figures. I woul dhave thought a bank would want to get them professionally valued first, to make sure they aren't lending more than the house is worth.
That doesn't really make sense, as the QV is often what the RV is, as many councils use QV for valuations. QV sent a valuer this year when we disputed the value of our RV, and they adjusted it by about 100k. But isn't everyone saying that RVs are not relevent, and only used for rating purposes?
QV is the acronym for the company name, Quotable Valuation. That company does most of the rateable valuations across the country (the councils pay for these to be done). They also do market valuations - which is what Kimy is talking about.
If you disputed your RV and it went up by $100K - then perhaps you had done some kind of major addition or renovation that had not previously been taken into account. Or perhaps your property had been undervalued for rating purposes for years (something that a person not planning on selling or re-mortgaging would be happy with as they end up with lower rates).
In my opinion, RVs are not market values - in fact many are well over the clearance (market) price, particularly for 20+ year old homes which haven't had much upgrading over the years.
Hey ROZGONZ , I was just taking the Pi&& .
Labour are very silent right now about their hare-brained scheme , they know they could never embark on a housing program to house everyone with their own home in Auckland, its a physical and financial impossibility .
And , I would never dream of voting for Labour , even if they offerred me a house for free .
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