Auckland Council’s chief economist says if we suddenly increased the number of houses built in Auckland by 20% and reduced population growth by 25%, we’d still be 30,000 houses short in nine years’ time.
Speaking at an Infrastructure New Zealand conference last week, David Norman did a stock-take of where Auckland’s at in terms of ramping up the supply of housing.
To begin with, he put the housing shortfall in the region at 46,000 - a figure on par with the Ministry of Business, Innovation and Employment’s numbers and slightly lower than the Reserve Bank’s.
While the number of new dwellings consented picked up from mid-2017 to an annual gain of 25% in June, Norman noted the blip in the upward trend of consents issued that resulted from the Auckland Unitary Plan being bedded in.
During the months preceding the plan becoming operative in November 2016, land owners held off lodging their consents until they could be certain about the level of densification allowed on their properties.
This hesitation lingered for the nine months following the Plan becoming operative.
Norman said the pick-up is notable now, with the growth in Code Compliance Certificates being issued rising to 28% per annum, as we find ways of getting projects signed off quicker.
He pointed out 85% of growth in consenting activity has been in brownfield areas.
“Given the increased choice the Unitary Plan has delivered, guess where people want to be? They actually want to be close to their jobs. They don’t want to sit in traffic for an hour to get to work by building 40km away.”
When it comes to the proximity of new dwellings to Auckland’s “rapid transit network” (RTN), or areas within 1.5km walk from trains and the northern busway, Norman pointed out multi-dwelling units are where it’s at.
While the RTN only makes up 2.6% of Auckland’s land mass, 40.5% of multi-unit dwellings consented in the 11 months to June were in this area. Meanwhile 11.7% of stand-alone houses consented were in the RTN.
Norman also noted the average size of dwellings consented had fallen by 42m² over the past five years - largely due to multi-units accounting for a larger portion of consents.
He said the size of stand-alone houses was still “embarrassingly large”, but the lift in the size of townhouses showed people were making the switch - due to affordability or proximity to town, for example.
He noted the size of apartments had dropped off, having picked up in recent years as more luxury apartments came to market in addition to the shoebox ones catering for students.
Turning to affordability, Norman’s modelling indicated Auckland housing is the most affordable it has been in 3.5 years, with loan-to-value ratios for investors, capital controls in China and changes in the composition of housing being built cumulating with other factors to offset price growth.
Digging into his affordability data, Norman concluded the largest decline in affordability has been among middle income earners.
“This is the scale of the challenge we are facing,” Norman concluded.
Voicing his support for KiwiBuild, he said: “We need to be open to whatever options are available to deliver more housing faster, if we are going to deliver to a wider range of people than we currently are.”
127 Comments
There will be even less supply now that the foreign buyer ban excluded new houses and apartments. All the current foreign buyer demand will be channelled into buying off the plan, then when they are built, they will be left empty. As we have seen in Australia which has a similar restriction on existing homes, but no restriction on new homes. All that will be achieved is the huge misdirection of scarce capital and labour into building ghost towers and subdivisions.
In addition, foreign developers are still free to buy up residential land for development, and this will push up the price of sections. In Melbourne, where Chinese developers bought 67% of the available land for development, the prices of sections have risen 30% in the last year. The foreign buyer ban should have been a full ban - loopholes cause massive distortions in the market.
Weird (Asian?) belief that a house loses value when its been lived in. Not sure if that's why a place up the road has been empty for the 9 months I've been in this place, but there certainly are some places that get left empty for extended times for no good reason.
Both corrections will not take place together while housing supply remains fairly below population growth.
A correction of house prices without adequate supply is to come at the cost of consumer confidence and business activity, leading to lower wages. Higher median wages will increase aggregate demand for houses that are already in short supply, pushing prices up and reducing affordability.
So to avoid a financial crisis from devastating our economy for decades to come, slower population growth and greater housing supply is needed.
Don't get me wrong, I'm quite happy if landlords are happy to rent me a place for less than it costs them to pay the mortgage and other expenses.. But eventually they want a return on their investment, so that puts a cap on house price relative to rent, and they aren't going to be happy making a loss for 15years before they eventually get a return. And rent is capped relative to income. So yes, there is a limit on house price relative to income and interest rates.
I do like the knee jerk statements like “they will just put up the rent” in response to any proposed initiatives that are seen to make things a little more difficult for landlords.
It’s almost like Landlords aren’t currently charging as much as the market can bear, like they’ve got some spare headroom in rent raising up their sleeves just to spite anyone who goes against them.
True but you have the occasional rent rises to gobble up the additional $50 student allowances. You also have the thousands of empty houses scattered across major population centres in Australia and New Zealand - the odd property owners who treat houses as valuable metals bought for capital gains on interest-only loans.
https://www.stuff.co.nz/life-style/homed/latest/103024164/is-it-time-to…
The same people that are buying them now. To live in, or to rent out.
Why would they continue to do it in the face of rising prices, and Australia getting cheaper by the day? The calculus is shifting. You might respond with "for capital gains!" but how much longer can that continue? The most unafforadble cities in the world are all major tech and financial centers, except Auckland.
So I'm not going to be able to find a past comment from you suggesting prices are going to fall?
Doubt it. I've never made sweeping predictions about what prices will actually do in reality. What I have done is continually repeat how overpriced and shitty our houses are, especially given our mediocre salaries and high cost of living. My position has always been that it's just a stupid idea for an FHB to buy here.
A great article. Auckland's housing shortage will continue to provide support to the current level of the market in the short, and most likely medium, terms.
I was one who a year or so back thought that the Auckland market was over-heated and at risk of a correction. This was based on affordability issues, likelihood of mortgage rate increases as was then mooted, and the high level of immigration being temporal.
However, over the past six months to a year or so, factors have changed, it now seems that the market is unlikely to experience a significant correction in the short term at least.
The shortage of Auckland housing supports this contention. Other reasons supporting stability in the Auckland market in the short to medium term are; the dovish attitude of the RBNZ to the OCR, the likelihood continuing low mortgage rates by historical standards, some increased activity by FHB (although affordability issues remain), the continuing (although falling) historically high immigration rates, relatively stable prices being maintained over the past 18 months since the peak of the market, and the fact that the market has held up relatively well over the winter period which typically experiences some seasonal fall. A spring increase in prices of 1 to 2% wouldn't surprise me (nor would REINZ trumpeting it as signs of a resurgence in the market).
The major negative for the market is that RBNZ figures on new mortgages show that investor activity is significantly lower which can be attributed not only LVRs, but more probably importantly, both poor rental yields and significant capital gains unlikely. Given the current situation, investors will not be relatively active in the market until yields are much improved.
As the level of foreign investor activity has been low - NZ Statistics put it at 3% - the foreign buyer ban is not likely to have a significant effect on the market. This legislation is probably more about xenophobia and political benefit, than addressing housing affordability. (And remember that the percent of overseas buyers includes immigrants intending to reside long term - if not permanently - but have so far not sought permanent residency or citizenship.)
Out of interest, what do you believe the number of mortgages issued to FHBs is compared to total mortgages issued per month, and how do you think they stack up compared to number of investor mortgages.
I'm talking number of mortgages, not $ value.
I'd be curious for anyone to answer that question without checking stats. Just interested to see how accurate the punters on here are compared to the rbnz stats.
So feel free to reply in this format:
FHB xx%, Inv: yy%. And to be clear, i'm talking number of mortgages, not value of the debt.
Sorry been there - NZRB /statistics/C31 - but I wont spoil the game and look forward to the responses.
Good recent historical information from when I think RBNZ began first taking such statistics in 2014.
Pleasing to see you ask regarding the number rather than the value; interest.co in the past has reported just on value which tends to distort the picture. This is due to; firstly, changing value of houses; and secondly, investors, FHB, and owner-occupier (and businesses for financing purposes - but only about 2% of all mortgages) tend to be borrowing differing % amounts and buying houses of differing prices.
Hopefully in future interest.co will report on both value and numbers.
Yes, and when you see the fall in the number of investors (nationally) down 48% from May 2016 to May 2018 you know that I do not exaggerate when I say that there is far less investor activity (and I suspect that that % down will be higher in Auckland but lower in provincial centres).
Simple. If you are on average NZ income you cannot afford a home in Auckland. If no one comes in at the bottom, the top will eventually fall. At present the current asset owners are swapping house among themselves. The Boeing has run out of fuel.... but will glide for a while.......
"If no one comes in at the bottom, the top will eventually fall". Why? (not that I accept this premise)
"At present the current asset owners are swapping house among themselves". Except for the fact that first home buyers are strongly represented in the statistics at the moment. And except for the wealthy UK, Chinese and Australian immigrants selling their houses overseas to buy in Auckland, and earning good incomes over here. People on this site seem to think that all immigrants pick kiwifruit and drive for Uber.
And except for the wealthy UK, Chinese and Australian immigrants selling their houses overseas to buy in Auckland
Well, it's good to see more open acknowledgement from investors that Kiwis are being displaced from Auckland housing by money coming from overseas. At least the pretense that it's not a factor is waning somewhat.
When even investors are laying high prices at the feet of Johnny Foreigner, you know something's shifted.
A few things could drive that BLSH-
Legislation - we've seen the foreign buyer ban go through, we're seeing a push on Airb'n'b via rate changes, negative gearing to be removed, depending on the results of the census (which I believe will be eye-opening) there could even be a will to charge empty home tax, introduction of a proper DTI, a land tax, an overseas owner tax, capital gains tax. All of which will make the accumulation of property less appealing or more difficult.
Local Banking - Interest rate changes, removal of interest only mortgages
Global - interest rate changes, economic judders (share market has just gone through it's longest bull run in history, trade wars, China's debt bubble etc..)
Foreign buyer ban - Data shows that even during the last minute rush before the Act came into effect, foreign buyers were only noteworthy in Queenstown and a select few central Auckland suburbs. Across the country, foreign buyers accounted for only in the order of 3% of sales. Also, the Australians, who are exempt, are close behind the Chinese. This was a symbolic gesture by Labour to score points with their base. The "foreigners" buying houses here have permenant residence or kiwi passports.
Negative gearing. Will push some landlords out of the market. Owner-occupied houses have lower occupant levels, so overall effect will be to increase rents. Will seriously deter investment in the housing sector. Big issue that could cost CoL the election.
Empty home tax - It a myth that homes in Auckland are left vacant. Where is your evidence? This would have no impact. Even if there were lots of empty homes, the owners would just rent them out, not sell the property.
Introduction of a proper DTI. It is far more likely that the LVRs will be removed than DTI will be imposed.
A land tax & an overseas owner tax. TOP are a wasted vote and won't be around to push for any of this nonsense.
Capital gains tax. Their already is one - any changes won't have much impact.
Interest rate changes. Newsflash, these are staying where they are for quite some time and may well go down, not up.
Global issues - This will negatively affect NZ as a small open economy, but we are in a reasonably good financial position to cope with unforeseen shocks. Housing prices would recover shortly thereafter, just as they did in 2009 after the GFC.
You’ve neglected to mention one of the more relevant considerations - falling immigration.
Evidence for empty homes here - https://www.stuff.co.nz/life-style/homed/latest/103024164/is-it-time-to… and in various other news outlets, try Googling.
You believe that removal of negative gearing will push up rents, or your property seminars have preached that at you.
Foreign buyer ban - heard of the ripple effect? And please stop quoting 3%, that number's been debunked so many times it's actually painful to hear it.
You say removal LVR, I say DTI, meh you're no more an expert economist than I am, however, you asked what could cause it and a DTI would.
Interest rates - Again you asked what could cause it I answered that question. I've no idea whether interest rates will go up, down or sideways, and funnily enough neither do you.
Global issues - you realize we were hardly touched by the GFC right? This time we're significantly more exposed as our shields from the last one, Australia and China, are creaking. We also have encouraged those two particular countries to invest in our current housing market, they lose their wealth over there, what do you think they'll do with their assets here?
Land tax and overseas owner's tax - again you asked what could happen, and I gave you an example of what could happen and is in the armoury, much like a foreign buyer ban, which couldn't be done, is now law. There'd be few who resented overseas owner's being charged a tax based on the general response (outside of property speculators) to the foreign buyer ban.
You’ve been practicing your mental gymnastics very hard, I can tell. Funny that you get your evidence from stuff.co.nz articles. If houses are vacant, and this tax (which won’t be implemented) is implemented, the owners will rent them out, not sell. Most of these things you’ve mentioned are so far fetched/unlikely - classic mental gymnastics.
Cracking rebuttal there champ. I must remember not to debate such an intellectual titan again.
Again try Google for other stories - you'll see them from the Herald, NewsHub, TVNZ, you can pick your preferred flavour, Google FYI it's a rather large website that enables you to find things on the internet.
What are you moaning about? Such a tax could be used to reduce the need to raise rates, giving you a freer ride on top of your city-sponsored betterment. Is the old knee simply jerking out of habit?
Vancouver is estimating $30 million from their version of the tax: https://www.theglobeandmail.com/canada/british-columbia/article-vancouv…
I didn't bring the idea up, but it's a reasonable response to foreign (essentially) land-banking.
How do you qualify a property as vacant? No furniture, no power or water usage? How long does it have to be empty to qualify as vacant? Could someone be admitted to hospital for a time and have their house designated vacant? What about people like my neighbours that go to their lake house for 3 months over Summer?
Put simply it’s a dumb idea. If it ever does emerge it will be proof that all of the other supposed house price killers have failed. Maybe they will revive the UK window tax after that?
Unless National storms back into power and throws open the dairy mills, slashes minimum wages to a third of what it is, let's the Chinese shop for houses online from mainland using Alipay and puts up an instant approval portal for visas to Indian students on the INZ website.
This may sound dreamy and far-fetched but you never know what those neolibs are capable of doing when their business earnings are under threat.
Magical, a mere 20% improvement?
If Auckland could find its way to adopt mediocre and average planning competence - there would be a 40% increase in building rate. No magic required and it is obvious how we are being utterly screwed by this incompetent council.
David Norman says “Given the increased choice the Unitary Plan has delivered, guess where people want to be? They actually want to be close to their jobs. They don’t want to sit in traffic for an hour to get to work by building 40km away.”
Wow, someone at Auckland Council has finally discovered a truth known to the entire world - people do not like long commutes. Well done David Norman, maybe that fat salary we pay you isn't completely wasted.
Now the follow up questions are:
- If people do not want to live 40 km away from Auckland, why does our inept and stupid council insist on building all of our suburbs 40 km away from Auckland?
- Why are we spending $billions of dollars building massively useless suburbs that force people to take long commutes that they do not want to do?
- Why do we not build suburbs 20 km away from the isthmus at Greenhithe, Takanini and Albany?
Agreed, but the underlying problem is kiwis want their plot of grass... in the middle. Unfortunately all the land in the middle has housing or buildings of some sort on it all ready, so the plan has to be to go UP. Which it does. UP in the middle, and UP along the transport corridors. Accordingly living in the middle is supply and demand, pay the piper or hit higher density dwellings.
Definitely think there is scope to bring in an empty house tax to force the one blatantly empty and capable of occupancy. Not sure how much of an issue this really is. Gareth Morgan fessed up to doing it so who knows.
Great, I was waiting for your opinion.
As I have said before, and the data shows (Commuting patterns, etc) - these areas are not suburbs of Auckland, they are regional centres in their own right. Like any city, they need the capacity to grow. The obvious effect being that allowing these areas to develop economically takes pressure from the Auckland Isthmus.
If you cannot recognise this fact, you'll forever be looking like a fool in your understanding of the AUP.
Why are we spending $billions of dollars building massively useless suburbs that force people to take long commutes that they do not want to do?
Again, as per above. Pukekohe and Warkworth aren't suburbs, these are economic centers that take housing and economic pressure away from central Auckland. You have this silly idea that Auckland is completely monocentric, with a 50km radius of sprawl. You couldn't be further from the truth.
Why do we not build suburbs 20 km away from the isthmus at Greenhithe, Takanini and Albany?
Ahh, Greenhithe is not well suited for urban development - just look at the terrain. Only a small amount of it is suitable <15% gradient terrain.
Takanini is on a flood plain.
Albany is the same issue as Greenhithe - terrain.
So, your solution is to develop land in the most expensive way? Interesting.
Hopefully that answers your questions.
For probably the 16th time.
The landowners currently flogging off subdivisions are getting a pretty good deal out there. Their subdivisions have been approved on the basis that the $600M drainage project will come to the rescue. Despite that fact that it is converting their land from undevelopable to developable, they haven't paid a cent towards it as it isn't included in their development contributions. They are essentially getting a $133K subsidy per allotment on the ratepayer. No plans to implement a targeted rate as far as I know, so its going to be spread across all ratepayers.
https://www.barfoot.co.nz/588968
These guys recently got subdivision consent for 32 Lots. Many similar sites surrounding it.
Again, as per above. Pukekohe and Warkworth aren't suburbs, these are economic centers that take housing and economic pressure away from central Auckland. You have this silly idea that Auckland is completely monocentric, with a 50km radius of sprawl. You couldn't be further from the truth.
Let us assume that you are correct, Pukekohe with more than 35% of its workers commuting into Auckland is somehow not an exurb of Auckland and the 3 km gap planned between contiguous urban Auckland and Pukekohe/Paerata is somehow a barrier to commuting. Let's try to indulge the fantasy of nymad.
Building lots of expansion into small peripheral towns and not building expansion into the big city - will actually take pressure off the big city. And you end up with lots more of the jobs being in the small towns and less in the big city - which is bad because jobs in the big city generate more economic activity.
But back to reality:
- Orewa has hills, as does Long Bay, as does Warkworth, as does Tamaki Heights. And so does Albany and a lot of the existing North Shore. I sure hope you never visit Wellington or Queenstown or Tauranga you will faint with amazement as your mind is blown.
- Takanini is swampy like Sandringham, East Tamaki, Ellerslie, Mangere. Hardly an insurmountable problem.
Those 35% of workers from Pukekohe are not travelling to the central city. The majority are commuting to contiguous area units or relatively close areas. Census data shows us that - you make the mistake of assuming that all outward flows of workers are going to the Auckland CBD.
Yes, agglomeration effects occur building up the central city. But the returns to that are diminishing in various economic factors and capacity. Returns to agglomeration are much higher in the smaller satellite areas.
I'm not saying you can't build on hills or swamps. What I am saying, consistent with the urban science literature, is that these are prohibitive to development. The logic for this is simple - just look at where the predominance of development has occurred. I'll give you a hint - it's on land with a slope <15%.
I know they commute to the whole of Auckland City and not just the CBD. So I think having more housing choices close to the contiguous city is beneficial.
There are hills where we are building and hills where we aren't building.
Auckland has recently approved 1500 houses on the same floodplain we cannot build on at Takanini. These houses will not be at Takanini with its railway line and motorway, instead these are being built around Clevedon. Are there lots of jobs in Clevedon?
I'm not saying you can't build in remote locations. What I am saying, consistent with the urban science literature, is that these are prohibitive to development. The logic for this is simple - just look at where the predominance of development has occurred. I'll give you a hint - it's on land nearer the city. (Apologies
for the copy, but good format.)
I'll give you a hint - it's on land nearer the city. (Apologies
for the copy, but good format.)
Well, duh. The development occurs organically around a central area. Naturally.
But that development exclusively follows the geographic features/contour of the land.
I doubt you could build 1500 dwellings on the residential (single house) zoning areas available in Clevedon, mate. Better check that one again.
Perhaps 100?
Repeat that again please because it seems the rest of the world doesn't know about NZ's homelessness. NZ is not even in the top 10 for homelessness...
https://en.wikipedia.org/wiki/List_of_countries_by_homeless_population
this website doesn't even mention New Zealand:
https://homelessworldcup.org/homelessness-statistics/
not one NZ city in the top 15 or 25 cities for homelessness:
https://www.therichest.com/rich-list/poorest-list/the-15-most-homeless-…
https://list25.com/25-cities-extremely-high-homeless-populations/3/
Not saying that homelessness in NZ is not a problem but the statement that you keep reiterating doesn't sound correct.
1. As per your Wikipedia link, we have the highest homeless people as a proportion of our population among the high income nations of the world. For a relatively low population, it is hard to justify anything from a headcount standpoint.
2. Our cities are much smaller than the average sized cities across the world. Barring one, none of our
cities are home to even half a million people. Again, doing a headcount ranking does not justify.
Why dont you read this one... 1% of our population. Disgusting. https://www.google.com.au/amp/s/www.nytimes.com/2018/06/22/world/austra…
1. As per the wikipedia link NZ's homelessness is 0.94% some 15 countries have a higher rate
2. The above percentage is relative to population size and thus gives an accurate ranking relative to city size
The comment was an absolute comment saying NZ has the highest homelessness in the world. #FACT - this is not true.
Go to Africa and you will see what real homelessness is. Children under the age of 6 living on the streets. Beggars at every intersection. Not saying that NZ does not have a problem as no one should be homeless but don't be extreme and say NZ is the worst in the world when the problem is significantly worse in other countries. That's really ignorant.
You are tiresome. Had you presented the correct facts in your first comment then this whole conversation wouldn't have happened. As mentioned numerous times, I have no issue other than the fact that your comment was incorrect. NZ has homelessness but NOT THE HIGHEST IN THE WORLD. Get it through your head. It's like arguing with an idiot. I have even agreed with you that there is a homelessness issue and that no-one should be homeless but you just can't reason with some people. It's like someone saying that Australia have the best rugby team in the world. Are they a good team? Yes. Are they number 1? No. By your logic this would have to mean that Australia has to be the best team IN THE WORLD and everyone else is stupid if they do not agree and that they hate rugby. Sigh.
Have they only just figured this out. If they were even slightly competent or honest they would have realised this many years ago and done something to make land available to meet the need; one of the most important functions of a council.
This statement is an absolute indictment on the council themselves and demonstrates how utterly dysfunctional they are. Should they be replaced with a statutory manager?
I know this has been said within the threads on this website a number of occasions but where is Winston? One of NZ First’s main platforms was to significantly reduce immigration rates. Arguably, this is the reason he is now in government. I think many voters have the right to feel highly aggrieved.
It will take concerted pressure from voters.
You have two problem groups here:
1. The Delusional Selfish Prat, who wants high immigration because it benefits him/her through being able to pay lower wages to employees and to get higher prices and rents from property.
2. The Bleeding Heart, who sincerely believes that any desire to reduce immigration levels at all, even more in line with OECD norms, is driven by xenophobia, haaaaaaate and bigotry (always be sure to throw that one in for good measure, even if unsure what it means).
The Delusional Selfish Prat may pay lip service to the idea of reducing immigration - and may even have campaigned on it in the past - but low wages and high housing costs take precedence, so sorry. Cynical, but reliably dishonest. Believes he/she did it all on his/her own two feet and no dose of reality / fact is sufficient to divert from this. Occasionally pretends to be libertarian, but get real.
The Bleeding Heart cannot imagine a world in which all cultures are not equally good in every possible way, and where anyone from anywhere in the world doesn't have as much right to the place you live as you do (unless of course, you can brand them "colonialists", in which case the person who was there first greater right). Can be somewhat difficult to reason with when they're rooted in a fluctuating alternate reality.
Those who sit in an (un)happy middle want a Goldilocks level of immigration, but won't get it from either extreme group. They'll need to keep ratcheting up pressure on politicians.
Both sides can be quite infectious. Apply strong antibiotics and report back in three months.
Your bleeding hearts are Kiwis and vested interests. They will soon be outnumbered by people like myself - an immigrant with a visible immigrant family. We want NZ to stay as we found it when we arrived. We like sensible controlled immigration but hate the out of control hyper-immigration that makes NZ the world leader for legal immigration. We are well aware of what racism is and it has nothing to do with reducing the numbers of immigrants to sane levels.
I've made enough comments anti high immigration. But if it is handled carefully we might be less susceptible than most developed countries to civil unrest. Firstly Kiwis are more used to travelling overseas than most countries and not just travelling for short holidays - so we are cosmopolitan. Then we have a 'Fair go' attitude. Third point INZ has kept out immigration well mixed - it is when enclaves start forming that you have problems (that is beginning to happen - joy for sociologists enamoured with multi-culturalism but not for anyone else). What INZ has failed to do recently is stop the low wage immigration that previous govts encouraged which has led to serious rorts and exploitation and allowed corrupt businesses to thrive at the expense of honest businesses.
The argument against immigration is made every time a voter sits in a traffic jam or finds his kids school crowded with a teacher shortage. Maybe Labour wants a 2nd term; if so they will control immigration.
If we vote for sunny weather in July and and the politicians don't deliver, whats it say about our democracy?
Immigration is indispensable to the economy ; anyone with half a brain or any sense of responsibility knows that . Even the COL came to realize that once actually in power and having to make real decisions ...
Not indispensable at the current levels. This high inflow rate with inadequate skill mix gives our businesses a free pass out of innovation and capital spending, and we will never achieve organic economic growth and higher wages.
It doesn’t take a mathematician to look at the work visa approvals by occupation stats on govt websites to understand that migration numbers are being skewed more towards non-skill shortages.
The government wasn’t elected to stop immigration but to limit it to a need-based number.
I suspect the decisions they made to end the low quality export education market as a path to residency will make a marked difference.
Additionally, the funding boost given to the Labour Inspectorate is also of benefit. It's just nuts that Burger King (and any other minimum wage employer) can make application for residency based on a job offer as a "restaurant manager". Nuts. That loophole has been cut off at the knees and the exploiters are being closed down on it rapidly.
Watch departures of ex-int'l student, non-citizens start to rise.
More money will be needed in future to police over-stayers though.
At some point existing housing stock prices must fall.
We were looking at moving. Our current place is too small (we bought it before the kids)
Yet everything we look at is infinitely worse:
- Poorly located, and haphazardly sub-divided. (You have to drive everywhere - shops, schools, parks, work)
- terribly situated (Perching on a cliff, shady side of a hill, bottom of a ravine, under transmission lines, net to a highway)
- Poorly designed (Aspect, layout, position on block, no privacy, oversized, impractical)
- never maintained (I understand this one to a point given how much it costs to do even the simplest thing around the house)
- poorly renovated (Again, somewhat understandable due to costs)
Then you look at the price!
I can see why sales volumes are so low, why would anyone move?
Oh I agree entirely, It is just wishful thinking of a functioning market.
Some of the dumps around should really be paying the buyer to dispose of them.
But reality is, we keep the migrants flowing in, the price of materials artificially high, the consent process complicated, the land use restricted, and the covenants impractical.
Another 20 years and we will all be billionaires!
Agreed.
Perhaps not billionaires, but maybe multi-millionaires:
https://www.interest.co.nz/property/93951/chief-executive-property-inst…
Interesting development today. Even the Granny Herald is starting to print descriptions of how much older generations benefitted significantly from government efforts to foster access to affordable housing in the past, only to stop in recent decades:
...a new report showed the housing crisis for these workers - who included teachers, nurses, police officers, administrators, baristas and cleaners - had been building since 1990.
It was then the Government dramatically reduced funding for affordable housing programmes and developments, the report by the Centre for Research, Evaluation and Social Assessment found.
This drop in funding meant that while more than 60 per cent of new houses built in the 1960s were affordable homes valued in "the lower two quartiles" of the market, by 2010 only 10 per cent were in the cheapest quartile.
"If the Government doesn't fund affordable outcomes, then they don't happen," Figenshow said.
"The market does not deliver affordable outcomes by itself."
How novel.
You must be the King of de Nile after 8 years. As for me, apart from a strong antipathy to the current Government you will see my other posts are about data, not spruiking. I own one property, my home and hope to stay in it for the next 20 plus years. I just call out the posters being economical with the facts looking for confirmation bias.
Here comes the correction we're all looking for...
Ignore the CV!! Owners are EXTREMELY MOTIVATED AND PRICED THEIR HOME ACCORDINGLY.
26 Halifax Avenue in DGZ Epsom
(C.V $2,025,000 - priced to sell at $1,679,000)
https://rwremuera.co.nz/auckland/epsom/26-halifax-avenue-rmu25830/
It is the end times!
But seriously, if we look at the sales record we will notice that the current owners bought this house for $1,005,000 in November 2012. According to the ZS principle it should be worth something like $1,600,000 or less, possibly around $1,500,000 in today's climate. That's still a cool half million in less than six years.
Nice area but I can see some drawbacks like no garage and a steep hike to the front door.
Migration has already dropped 12% since its peak in 2017 and there is more to come. There is a good chance we could have significant drops in the short to medium term. As the economy slows, so will migration. If there is a global shock we could see it slow significantly. Long term I believe it will be high though as more people want to live in NZ. The change of migration and credit supply will have an impact on things.
Compared to average OECD countries (most of which have immigration concerns) NZ is 300% higher so a reduction by an eighth is insignificant. However the more important permanent residency figures had dropped from 52k in 15/16 to 37k in 17/18 which is a reasonable reduction most of which applies to rule tightening made by National.
There is indeed a housing shortage. But a large proportion of the people in need cannot afford or get a mortgage. Building x more homes or driving down prices 10% will not help them. They may well have four or more children, work two minimum wage jobs and struggle to feed themselves, never mind save for a deposit. And regards migration. Young singles are the ones who aren't coming and they don't buy houses. Housing is not a simple equation. If we had queues of desperate people in a position to buy homes, rents would not be static and prices would not be falling. And in response to another comment, land banking is easy to tackle. Tax it at the implied improved value, which in effect is what is being lost in revenue.
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