By Greg Ninness
An accumulated housing shortage of more than 34,000 homes has built up in Auckland over the last five years, according to the latest calculations by interest.co.nz.
Every year interest.co.nz estimates the Auckland region's housing shortage by comparing its population growth from both the natural increase in the region's population (the excess of births over deaths) and the net gain from migration (from both overseas and within New Zealand), and estimates how many additional dwellings would be required to house the extra people, based on average household occupancy.
Until now, that figure has been compared to the number of new dwelling consents issued in the region to estimate the shortfall.
When those figures were last calculated in October, it suggested a shortfall of 19,908 dwellings had accumulated over the five years to June 2018.
We have now updated those figures and instead of using building consent figures to calculate the supply of new dwellings have replaced them with the number of Code Compliance Certificates (CCCs) issued for new dwellings by Auckland Council.
This gives a much more up to date picture of the supply of new housing because it is typically around one to two years from the time a building consent is issued until a new home is completed, but CCCs are generally issued about the time a dwelling becomes ready for occupation.
Those figures are displayed in the table below and they make for grim reading.
The CCC figures suggest a housing shortfall of just over 34,000 dwellings accumulated in Auckland over the five years to the end of June, an increase of 72% on the shortfall of 19,908 suggested by the building consent figures.
This would help explain why the Auckland housing market has remained reasonably resilient, both in terms of prices and rents, even though housing sales have declined and the market has cooled over the last couple of years.
However there is also some good news in the figures because they show that while Auckland's population is still growing at a faster rate than homes are being built to house the extra people, the rate at which new homes are being built is increasing while the rate of population growth is declining.
As the table below shows, over the five years to June 2018, Auckland's annual population growth peaked at 44,300 in the year to June 2016 and has since declined steadily to 38,600 in the 12 months to June this year.
Over the same period the number of CCCs issued each year has more than doubled, rising from 4322 in the 12 months to June 2014 to 9433 in the 12 months to June 2018.
That means that the housing shortfall being created each year peaked at 8919 homes in the 12 months to June 2015, and has declined sharply to 3434 in the 12 months to June this year.
So although Auckland's housing shortage is still increasing, the point at which supply starts to match demand is certainly on the horizon.
And that's where building consents become useful because they are a pointer to future housing supply, and they show that 12,369 new dwellings were consented in the 12 months to June this year, just shy of the estimated 12,867 needed to match population growth.
If present trends continue, and migration continues to slow and housing supply continues to increase, then it is possible that the supply of new homes in Auckland will start to outstrip population growth sometime in the next one to two years.
However there will still be a substantial shortfall to address before demand and supply get properly back into balance.
But in the meantime the numbers are certainly heading in the right direction.
| Auckland's Growing Housing Shortage - Year to June 2014-2018 | |||||||
| Year to June | *Natural increase in population | *Increase from net migration | *Total Increase in population | Estimated no. of new dwellings needed |
No. of new dwellings completed (CCCs issued) |
Annual housing shortfall | Cumulative housing shortfall |
| 2014 | 14,200 | 19,600 | 33,800 | 11,266 | 4322 | 6944 | 6944 |
| 2015 | 13,900 | 29,100 | 43,000 | 14,333 | 5414 | 8919 | 15,863 |
| 2016 | 13,500 | 30,800 | 44,300 | 14,766 | 6730 | 8036 | 23,899 |
| 2017 | 13,800 | 28,900 | 42,700 | 14,233 | 7416 | 6817 | 30,716 |
| 2018 | 13,000 | 25,600** | 38,600 | 12,867 | 9433 | 3434 | 34,150 |
*Source: Provisional figures from Statistics NZ **Adjusted for rounding. CCCs = Code Compliance Certificates issued for new dwellings by Auckland Council
Code Compliance Certificates
Select chart tabs
102 Comments
Sounds like the same number of vacant houses !
A shortage of houses in Auckland combined with population growth means, clearly, that there needs to be some form of rationing......
The market, of course, is largely responsible for rationing houses in NZ - and, as always, it achieves this through the price mechanism.
The above explains why Auckland house prices have not fallen - despite the sizeable upswing during 2014-16....... Inevitably, upward pressure on prices is needed to ration out the on-going shortfall of houses.
Enjoy the remainder of the weekend!
TTP
" clearly, that there needs to be some form of rationing..." Of course! Rationing of the number of people we add to the population from outside our borders being the easiest, fastest and soonest solution can enact to get on top of the problem.
As I reposted elsewhere today, it's not too few houses that we have, but too many people....
Auckland can easily take another 60,000 a year
Make it a nice round 120,000 migrants a year
Imagine all the demands on services
I’m sure the schools and hospitals & roads will just magically sort themselves out like they did under 3 terms of National
More kiwis need to adopt my approach
Sell up and leave NZ
"price mechanism" it's curious that during this great period of house price inflation that the price of money has had to continually decrease, distorting the price discovery at marginal purchases and potentially disguising malinvestment. You need to understand the the "price mechanism" of money the instrument you value our house prices with, is not free market.
Sorry, but it had more to do with the RBNZ putting $8b into the economy.
Sounds like an unsubstantiated opinion Tony
Migration has only slowed a bit. International student numbers are still similar to 2017/2016.
Auckland still a magnet for jobs,
So Auckland cankeep looking forward to paralysed motorways, unaffordable houses, and growing distant multicultural social welfare suburbs.
The provincial cities are growing also from all the Auckland refugees.
Excessive immigration caused a housing shortage.
How can we have a housing shortage in Auckland when there are over 14,000 properties for sale on Trademe and the listings continue to grow, not reduce?
The number of properties for sale has little to do with whether there is a housing shortage. If there were 5,500 houses for sale in Auckland you could’ve just as irrelevantly said “How can we have a housing shortage in Auckland when there are over 5,000 properties and rising for sale of trademe”. Housing availability is a measure of how many houses there are in relation to the population.
"The number of properties for sale has little to do with whether there is a housing shortage."
Well, wrong. Because a shortage is defined as an inability of the market to clear. i.e. demand outstrips supply.
There is a blatant consumer surplus in the market. As shown by the substantial number of properties available remaining unsold.
This site is designed to help high school level economics students - I can see how it would be of benefit to you.
https://www.tutor2u.net/economics/reference/consumer-surplus
Well said Nymad, Adam. Like Sydney and Melbourne, Auckland also has a glut of unaffordable homes. Its common sense to the unleveraged.
The steadily weakening influence of the cashed up marginal buyer together with tightening lending conditions are primary contributors.
Absolute nonsense. That most certainly is not the definition of a shortage. A shortage is a measure of houses vs population. All experts recognise that there is a shortage (MBIE, RBNZ, Auckland Council etc), and I’m pretty sure they are in a better position to know than yourself.
There is an acute housing shortage in New York, but how can this be possible when there are over 70,000 properties listed for sale?
I mean. We can take the BLSH definition of a shortage. Or we can define a shortage by it's definition in economics.
No offence, but for consistency I'm going to define it as how it has been in the economics literature.
Saying there exists a shortage in housing relies on the assumption that there is a universal ratio of persons to houses. As is mentioned below, changing this by only ~7% eliminates said housing shortage.
It also completely ignores the impact of price on the motivations of individuals - price impacts whether someone rents a room of house. Similarly it also determines the threshold in which owner occupiers start letting out rooms within their houses.
I don't deny that there is an affordability issue, at all.
But it is hard to make the case that everyone who demands shelter isn't receiving it. It may not be in the form of a house, per se, but people are adjusting their consumption based of their income.
Let’s use the definition that MBIE, RBNZ, Auckland Coulcil and Interest.co.nz use. You’re clearly just getting confused with supply vs demand / population vs number of houses.
The ratio is approximately 3:1, population to number of houses. Not that difficult to understand.
Absolute word salad. I’m embarrassed for you at this point.
How about we use the figures from the 2018 Census when they come out and see what the true occupancy rate is.
It's simple to create a deficit in dwellings by using the incorrect ratio of persons to dwellings.
Now you’re just changing to a completely different point. Your train of thought is incoherent.
First, contrary to the expert consensus, you claim that there is no shortage, rather a “blatant consumer surplus” “as shown by the substantial number of properties available remaining unsold”. This, despite the fact that the number of houses for sale at any given time tells us nothing about whether there are enough houses relitave to population. There could be 100,000 houses for sale in Auckland, but if the housing stock is overcrowded with people living in garages or cars, there is still a shortage.
Now, realising that your previous argument made no sense, you say that it all depends on what 2018 census occupancy rate is? Wow.
You literally just throw out economic jargon with little understanding of what it actually means and hope that it sticks. Its like the diminishing marginal returns nonsense all over again. Nothing more than rambling woo-woo.
You make me laugh.
The one thing consistent in all your comments is that it is you who goes off on tangents, evidently due to an inability to comprehend what you are actually arguing about.
P.S. The diminishing marginal returns on capital thing was hilarious. Thanks for questioning that and demanding proof of that. I'm sure I wasn't the only one that laughed at your discourse on it.
Diminishing marginal returns is high school economics. I never questioned that it exists, but pointed out that it is totally irrelevant in the context in which you raised it. HeavyG took you to task on the detail, and you had no response but ad hominem. Perhaps you are too slow to realise how embarrassingly wrong you were proved.
Okay.
I stand by my point that you are incapable of comprehending comments that don't fit within your unique world view.
P.S. Given yours and HeavyG's arguments, the Dunning-Kruger point was more than justified.
Nymad, you don't understand, the housing shortage has nothing to do with the number of houses for sale.
Example:
- 1 vendor wants to sell his house, 1 buyer wants to buy his house = no housing shortage
- 1 vendor wants to sell his house, 2 buyers want to buy his house = housing shortage
Clearly the number of houses for sale hasn't changed.
I hope you can understand this
It's a deficit based on a given occupancy rate.
And the market seems to be doing pretty well to ensure there is no shortage in accommodation given that there aren't ~100k people without some form of accommodation.
Rents haven't diverged notably from long term means, either. And there is a substantial surplus in rental properties, also.
So my argument is that:
1 - there is no housing 'shortage' in economic terms.
2 - the housing deficit is based on a notional occupancy rate; revise that upwards and there is no housing deficit. Hence why I said let us wait and see what the 2018 census reveals about occupancy rates.
There is an affordability issue. Not a supply issue.
Given that prices haven't increased recently in the face of huge inflows of migrants, this is the implication.
So you don't understand?
He doesn’t understand.
He has confused himself over the definition of a shortage. He doesn’t realise that there is a shortage if there are not enough houses in relation to the population. He has made up his own definition, where it doesn’t matter if there are enough houses per head of population, and instead a shortage is determined by the number of houses for sale and whether prices are increasing. He has confused himself with his own word salad.
It is not a matter of whether supply equals demand (desire and ablility to purchase). It is a matter of whether there are enough houses per head of population.
Also seems to think that the ratio of 3 people to 1 house is entirely arbitrary, when it is in fact based on housing stock and demographic stats.
Um...more unaffordable houses vs a population thin of cashed up marginal buyers. Market forces of supply and demand will sort the rest over time.
It seems to only make sense to those whose retirement doesn't depend on it.
Very poetic, why dont you publish it to earn retirement income Haha
There’s certainly a buyer shortage when it comes to auctions though!
Hi Adam B NZ,
Relative to Auckland's population, 14,000 houses on the market is a small figure.
TTP
TTP - really?
Let's just quickly put this into perspective...
Auckland:
- pop: 1.6mil
- properties: 14,000 (0.009%)
Hamilton:
- pop: 161k
- properties: 851 (0.005%)
Wellington:
- pop: 205k
- properties: 615 (0.003%)
Christchurch:
- pop: 374k
- properties: 2697 (0.007%)
So...Isn't Auckland unsold housing stock actually high relative to population among (relatively) comparable cities?
Hi nymad,
0.009% for Auckland is a pretty small figure.
But, in fact, the percentages are pretty low for all the cities you mention - not just Auckland. (Since TradeMe usage varies between regions, it's not a robust comparison.)
Despite the capital growth through the 2011-16 period, house owners (including in Auckland) show widespread reluctance to liquidate housing assets - suggesting many see prospects for further growth in the medium/long term.
In any case, owners/investors typically don't sell unless they get their target price: prices remain sticky-down.
As many people have found, selling out of the Auckland market (in particular) is perilous: it soon becomes too difficult to buy back in.........
TTP
bahaha.
Typical TTP comment.
Great counter-point using facts and logical argument to disprove TTP’s statement. Don’t want to serve up more word salad comprised of economic terms you don’t have even a rudimentary understanding of?
Agent TTP, at last count (2016) Auckland's more than 33,000 empty homes is no small figure. By percentage, its way higher than Sydney's!
Ah, so you're not in line with bhsl? Not fair
Thought experiment for you a house changes hands from one landlord to another, (perhaps even swapping the family tenanting it), how many more homes does that make available? Answer none. In fact if the tenants or owner occupiers do not leave the country there is no decrease in demand.
Adam B and BLSH are talking at cross purposes on the demand for house ownership. Both are referring to different types of housing demand - BLSH is referring to underlying housing demand, whilst Adam B is referring to effective housing demand.
In each property market there are two types of demand:
1) underlying housing demand
2) effective housing demand
1) Underlying housing demand
‘Underlying demand’ refers to the number of houses needed to accommodate households in the population. Population increase in the age range of 20–40 (which is when people tend to form independent households) leads to smaller household sizes and more single-person households. Further, positive net migration increases underlying demand for housing. A ‘household’ means either one person who usually lives alone, or two or more people who usually live together and share facilities in a private dwelling.
Natural population growth rates, internal migration, housing preferences and household formation rates all tend to change relatively slowly, and therefore changes in underlying demand caused by these factors are reasonably predictable. By contrast, the level of external migration depends on policy rules and incentives, as well as on wider domestic and international economic conditions, and it therefore tends to have a more volatile, less predictable impact on underlying housing demand
2) Effective housing demand
Effective housing demand is the combined effect of both 1) the desire to rent or buy a house, and 2) the financial ability to rent or buy a house. This aspect of demand is what shows up in the housing market statistics for sales, prices and construction. It also largely accounts for the changes in housing and tenure choices over time.
The New Zealand housing market has not only experienced increased underlying demand from population growth and higher net immigration; it has also (until the recent global financial crisis) experienced an increase in effective demand as a result of higher incomes, lower unemployment, cheaper and easier access to credit, and the preference of New Zealanders, for various reasons, to invest in housing over other forms of investment.
The difference between underlying and effective demand is a function of:
• buyer wealth and income
• the cost and availability of finance
• the state of the economy
• individual consumer preferences (for example, location, or between renting and owning)
• the attractiveness of housing as an investment good.
Source: https://www.mbie.govt.nz/publications-research/research/housing-and-pro…
This framework can also be applied to the supply side also. Then this can result in a underlying housing shortage (or excess supply), or an effective housing shortage (or excess supply)
The above article refers to underlying housing shortage, and not to fundamentals of effective housing demand and supply.
For those that are interested in house market prices, then it is important to know and understand which one is more correlated to house market prices than the other.
Great work by interest.co.nz
Pity the National governments excuses & propaganda shielded true extent of the housing problem they created by open immigration
How could a country of only 5 million be expected to shoulder the health burden of not only migrants but their family members ? I know the NShore hospital always treated first & requested payment later Try that in the US or even Canada it won’t fly
Chain immigration - you bring in one person from china but get two pensioners as well.
They all get schooled up by talking to each other on how to rip the system off. Accommodation supplements for living in the kids house, pension if they have been here long enough, free health care (cataracts etc...), all assets in trusts and then applications for kiwibuild, which they will rent out.
nig
You’re right but it’s not merely 2 pensioners you get
My neighbour had 6 months one pair of parents then 6 months the other pair of parents
As years go by one pair gains residency then the other pair
Eventually my neighbours house was purchased by another pair of young new residents and remained vacant for years. Result was a 5 bedroom home in a decile 10 school zone sat empty as a “investment”
No the National government deserve to be out of office
Xenophobia anyone?
Yvil
In my other country I hold a passport the UK my countrymen & women complained loudly about the levels of migrants
Guess what Yvil ?
NZ took in more migrants per capital of population than even the UK did In recent years
When I left NZ over 3 years ago the hospital emergency department was over crowded at 10pm on a Wednesday night. My kids decile 10 schools filled to over capacity even though kiwi birth rates were low for years. The roads jammed with leased German vehicles
Call it Xenophobia? Call it whatever you wish Yvil
Hmmm Kiwi families living in station wagons because there aren't enough houses to go around and people being faced with electricity and water shortages is Xenophobia???
Thing about most of these migrants they front up with this attitude of give us your houses and then when NZ had the highest homeless rate in the OECD - they took the attitude, we got ours so its not our problem and those people live in station wagons because they deserve to live in station wagons. The same will happen with water and electricity, its a case, give us your electricity and water and if some of you don't have any - its not our problem, we got ours.
nig
Yvil was using that racist xenophobic label
I’ve lived all over the world in my career & my best friend is a Malay and I love the Chinese
They are great loyal people to have as friends
Yet the Chinese culture can be the most racist around. Interment camps for people of a different religion, legalised stripping of human rights and discriminatory practices against anyone from pacific islands or africa, even the treatment to those of their own nationality but different ethnicity... that is even before we get to additional forced imprisonments of political opponents and the treatment for those in neighbouring countries. You may love some people but the culture is shaming. Even Chinese upperclass often have to travel through China under false names. It is a bit beyond disgusting.
Pacifica ? That’s the rulers of the country not the people in general who are good just like you are Pacifica
Side note I count people just like me, aka humans. But the culture is undeniably dictated by the dictators and those who accept them in their dictatorship. Would you condone someone who supports a paedophile continuing to destroy young lives as a good person? The Boston dilemma where a lot of "good" people are capable of awful shameful acts, aka the old school good germans. The culture of the people in the place and the people accepting the practices of the culture are in fact the same, only those who want to believe otherwise to feel better about their association with said person/culture would seek to make excuses so they too can retain the definition of good person. Hence why rapists are often defined by their good character by friends, (he is such a good sports player with a bright future etc etc), even though the rapist may support and actively seek to commit abusive and reprehensible acts of violence repeatably. You yourself will make excuses for your culture to retain the classification of good person even though lets face the honest truth, in all cultures there are no winners, no good cultures. Only cultures which are not as bad as those who abuse human rights and have internment camps for those who are ethnically diverse.
A homogeneous society becomes more extreme in its attitudes. The extremities are caused by increase empathy among the common populace. The greater the empathy for ones fellow citizen based on racial commonalities the greater the ability to react against those that are racially different (Han Chinese treatment of non Han Chinese within China) and the greater the ability to socialise with those that are considered racially similar (enduring socialist policies in Scandanavia - however these policies are now under threat as Scandanavia has become more racially diverse). Han Chinese and Scandanavians are among the least genetically diverse populations due to smaller founder populations and recent increases in population and area occupied. Conversely all right wing think tanks know that to increase the apathy within society for ones fellow citizen one simply increases diversity. Increased diversity is often a pre-requisite for increased right wing policies and a repeal of socialist policies. The more diverse society the less members of society are prepared to contribute to the well being of their fellow citizen and the more self centred the society becomes and this is reflected in national policies/laws.
If NZ was to return to a society that had full employment and full housing and health care coverage for its population we would have to become a lot less diverse.
Interesting reminds me a bit of
"First they came for the socialists, and I did not speak out—
Because I was not a socialist.
Then they came for the trade unionists, and I did not speak out—
Because I was not a trade unionist.
Then they came for the Jews, and I did not speak out—
Because I was not a Jew.
Then they came for me—and there was no one left to speak for me."
Diversity is not just on ethnic lines. Yet no matter the diversity of different groups it is the actions to protect all that matter. Regardless if they came for one or another, if they jailed political opponents, condoned murder for peaceful protesters, even worked on the populace mindthink to the point there was not freedoms left for most, how many would speak out, or is it at an abandon the ship stage because from this point on abandon all hope?
How can there be a worsening housing shortage in Auckland if prices have plateaued for the past two years. This does not fit the story previously rammed down our gullets.
Using the fixed measure of 3.0 individuals per dwelling is misleading at best.as this is a fluid number.
( Change it to 3.2 housing shortage gone )
Further Statistics NZ clearly show that the percentage of households renting is increasing at a faster rate than owner occupied,and although the numbers are not separated regionally Auckland undoubtedly is seeing the biggest change. We have an affordability problem, if individuals or households cannot afford or access debt, they cannot have it, whether a home or other. The fact that this is occurring in a period of historically low interest rates is worrying.
It's a case of STATS vs REALITY. ..
They don't take into account the illegal garages converted into rooms, where upto 3 students live. .
If you drive down Lincoln road in Auckland - the road with the highest traffic count in Auckland, you can see garages that border the footpath that have families living inside them.
Welcome to the third world!!!!!!!
Hi PP2F,
Note that the converse is also true......
There's a dire shortage of garages - especially in Central Auckland.
Thus, rooms are now quite commonly being converted into garages.
After all, a nice car deserves somewhere decent to live.
Seriously, demographic pressures in Auckland are a major issue - as is motor vehicle congestion.
TTP
"..demographic pressures in Auckland are a major issue.." Again, spot on! Fix that, and other problems get solved as a result. - motor vehicle congestion being but one.
These bloody immigrants have been robbing the noble Bogun of habitat for their fords and holdens.
nig
Holdens & Falcons no longer manufactured in Aus either
Still you do have a load of leased high end German vehicles paraded around the Auckland streets which keeps the taxable income at 0
Neither do they take account of the large numbers of Indian students living in homestays
I also read that some share beds in shifts like they do in submarines.
There’s my old friend Zachary
It’s PODS we call them in California
"hotbeds" in fishing vessels
Crap beds after a weekend of heavy drinking
If you double the population you need to double the the housing supply and double the Electricity supply and water supply.
Transpower brought out a study - they are projecting major electricity shortages. The fact that the population is too big for the hydro resources has been described as the politically correct 'dry year' and the expectation is this will occur more frequently. The shortages are expected to start in earnest in 5 years time.
Its not only a roof over kiwi families heads, its whether they have electricity to cook breakfast in the morning or keep the refrigerator going?
This uninformed saga of non-communication goes on and on, as sagas do...
Can we PLEASE have clarity on following:
Earnings growth in Auckland since 2013 v house price growth.
Need for housing v what you call "demand".
Need I would say is primarily with those who cannot afford a house with median of $750-850k and a deposit of a fifth of that. "Demand" in those terms is NOT for $650k Kiwi-build nonsense but for good quality, reasonably rent priced accommodation. That is not what is getting built, so that problem is not being solved is it??
It is PATHETIC beyond measure that Auckland Council and central government is unwilling or incapable of calculating how many owner occupied houses and flats there are in Auckland. The figures we get on internet are for census in 2013. We may get something up to date in March 2019. Looking at some figures available, the process of why there is a housing shortage (to buy or rent) is clear. The people with enough money, buy 75% of what comes on market, in order to rent it out. These people, according to Property Guru, own (often) 60 to 100 houses EACH. People paying rents of $450 - 750 a week struggle to save for deposit and prices still haven't fallen the 15% they did in 2007-11.
Also, can you please stop using the expression "market" and then saying good or bad - it is never clear what is meant: is it meant to refer to prices rising by some "healthy" rate pa? Or does it refer to sales? What is happening in Auckland is that sales are where they were in 2013 or lower and about half what they were at the peak of 2003-04 (42,000). That is despite all the increased supply in meantime! Finally, as 20% of sales in Auckland are "sections" and 40% of sales are to what is euphemistically referred to as "investors" (not 'landlords', notice...) and OBB will (analyse the sales figures for 2018 up to 31.8.18 and after for evidence) crush section sales, we can expect sales in Auckland to drop by 50% of that 20%, ie 10%, in the next year. That does not take account of the credit crunch making its way over here from Australia next Autumn probably, or the slowdown and problems in China "adjustment" or possible debt implosion. Prices drop after 3-4 years falling or plateauing of sales. Sales in Manukau for instance fell fell 50% in one year after 2015 mania. This is speculation pure and simple, which is laughingly referred to as a "market" and "investors." Market is not for people to buy and live in houses but just for what they can make as quickly as possible. That is a casino, not a housing market.
Mike
it's because 4 Australian banks control the NZ economy, politics, the media, the credit (which is vast and it's largely created out of thin air). The housing shortage is nothing other than a credit bubble and our regulators have let it go so long that they are terrified of the consequence of the credit cycle evening just flattening out. If credit actually drops, which it needs to, we go into a deep recession. It's actually pretty scary stuff but still the media play the tune the banks tell them too. Nothing to see here, no problems, everything is rosy.
Believe me it's not and it's going to end in tears!
Thanks Nic. Agreed. No disposable income or sufficient wage to afford so give them credit instead, whilst renting income siphons off income to rich 20%. FIRE economy. Problem is, the fuel for the fire is expiring in Australia and China. Notice most especially the decline in car sales in China since June, rising defaults, and 4% elec consumption growth, NOT 6.9%. All stats from China are a lie and our media don't want to question or analyse as that is what keeps NZ GDP figures up. Milk prices dropping, oil price imploding is due to falling demand in world economy. November REINZ stats will be sen by the ignoramuses as a "surprising" disappointment.
Auckland Housing shortfall: 34100
Average occupancy per each dwelling: 3
Number potentially affected: 102,300
Homelessness survey estimated 800 people living without shelter.
So where are the other 101,500 without a house? Perhaps the occupancy levels are actually slightly higher and there isn't a massive housing shortfall after all
Drive through west auckland and look for people living in garages with tin sheds from mitre10 outside being used to contain a BBQ for cooking. Drive to Wynyard Quarter late at night and look for the families living in station wagons. Its there and its the third world we just can't admit it.
How many KB houses combined will those garage dwellers buy? ... not one!
And why plan to build, although no chance of getting there, 100,000 KB homes. Interest.co.nz most generous calculations of housing shortfalls is one-third .... 34,000
Was a political thing. There’s definitely affordability issues in Auckland so Labour presented false hope in exchange for votes.
Right on, simple formula, but that's got alot to do with why the govt is such a joke.
When I was a teenager we would talk about our futures and the idea of living behind a "white picket fence" in some "nappy valley" filled us with horror. It's interesting how times have changed.
It occurs to me that we are looking at things completely the wrong way. Everyone having the same type of housing and lifestyle is grotesquely conformist. We have entered an age of diverse lifestyle choices.
The recent news about the Andaman pre-neolithic tribes people has made me realize that not all people need a KiwiBuild home. Experts, who know far more than I do, insist that this would be a terrible idea. Indeed what a travesty it would be to ruin the island with cheap terraced houses. Something would be lost forever.
In much the same way we have developing communities within our own society that we should consider preserving and protecting. The rough sleepers, garage and car dwellers are unique human developments and valid lifestyle choices that offer people an opportunity to forge their own noble paths in the world. At the very least their low carbon footprints are immensely beneficial to the world as a whole.
Jeez Zach, you are a wag. Scary thing is that it is true, environmentalism and anti-business thinking leads exactly there. The solution is to figure out what exactly is wrong with finance and business and politics and government bureaucracy that has led us to this situation. I'm not convinced we've identified the causes very clearly. Everyone has their favourite usual suspects of course, but that just leads us around the same old track of more regulation, collapse, less regulation, expansion with same problems, more regulation, collapse.
Witherspoon I think Zachary sees the Auckland housing shortage in Neolithic terms
Or it could just be the Jupiter 2 hit turbulence
So we're still peddling the housing shortage narrative. Can I just say again that there is no housing shortage... We can barely give the kiwibuilds away at present. All there is, is a serious misallocation of housing, a major credit bubble is the cause which has meant that owners of larger houses have kept them for longer than they otherwise would and re-financed them into retirement. The credit cycle is now flattening out (lending growth going flat) that's all it needs to tip the market over and the subsequent correction in house prices (which could be a crash to be fair) will re-allocate the housing stock to appropriate numbers of people per dwelling.
Time to stop peddling the 'shortage' story, there are hundreds of empty houses around Auckland, Hobsonville alone already looks like a big gamble gone wrong... Time for someone in the press to start providing the reality rather than a narrative that has been paid for by the lending institutions. New Zealand is at serious risk of following Australia into a major housing downturn. Let's take the blinkers off the horse and let it see the cliff?
Next year will be very interesting to look at the way the house prices go, here, and in Australia.
The former minister of immigration Michael Woodhouse opened the floodgates, right from the minute he started the job in Jan 2013 and never slowed the influx.
Nic - its best to keep the horses calm before the race to the bottom.
Independent Observer. Allow me to share a previous post from October.
Riding a Dead Horse - Advice for Investors in Property
The tribal wisdom of the Dakota Indians, passed on from generation to generation, says that when you discover that you are riding a dead horse, the best strategy is to dismount.
In modern economics, however, a whole range of far more advanced strategies are often employed, such as:
1. Buying a stronger whip. (Borrow even more money)
2. Changing riders. (Try and find some Chinese buyers to flog it onto)
3. Threatening the horse with termination.
4. Appointing a committee to study the horse. (Get the REINZ to try and massage some numbers)
5. Visiting other sites to see how others ride dead horses. (Let's see how they did it in the US. Right let's lower interest rates as low as they can go)
6. Lowering the standards so that dead horses can be included. (8 times interest only mortgages, encourage people to withdraw 'false' equity from the family home to 'invest')
7. Re-classifying the dead horse as “living, impaired”. (It's just a flat market after all, sure nothing is selling it must be flat)
8. Hiring outside contractors to ride the dead horse. (The agents will give us a fair view I'm sure)
9. Harnessing several dead horses together to increase the speed. (Let's go and buy in the regions instead (that's already happenened, sorry Palmy you've been over-cooked)
10. Attempting to mount multiple dead horses in hopes that one of them will spring to life. (Let's buy another one in Dunedin, that's sure to go up)
11. Providing additional funding and/or training to increase the dead horse’s performance. (Banks lowering their interest rates to try desperately to attract new buyers)
12. Doing a productivity study to see if lighter riders would improve the dead horse’s performance. (First time buyers, lighter means less experienced, let's start advertising FOMO to them with lots of bank advertising)
13. Declaring that as the dead horse does not have to be fed, it is less costly, carries lower overhead, and therefore contributes substantially more to the bottom line of the economy than do some other horses. (Let's add some negative gearing to help them out and have no capital gains on speculation)
14. Re-writing the expected performance requirements for all horses. (Negative returns are fine, that's what investment property is about, it's the capital gains in the future that you're after - sure that may be 2030 but that $5K gain will be worth it)
15. Promoting the dead horse to a supervisory position. (Don't worry John Key will oversee all this from his lofty seat at ANZ).
When the horses bolt the jockeys will look sad, so I'll ask....why the long faces?
Oh hahahahahahha I get it. loooong faces. Because horses have long faces.
Good response Nzdan .... I read the comment from IO earlier and gathered it was meant to be funny,
Nic Johnson - Very well said. I guess a shorter version would sound like this " The Smart Money Left A Long Time Ago ".
Oh look not many banks willing to lend over half a million to FHB before even seeing the property built. Yeah No Sh8t Sherlock. Of course kiwibuild preapprovals are difficult to get and even harder to hold. Yet they still had the other (over 10) applicants put in for the 3 homes that those successful applicants could no longer buy, those odds still see most of the applicants without a home to show for it.
Kiwi build is for immigrants with residency.
Who has never brought or owned a home in NZ before?
Who would have hidden assets overseas (not looked at by the NZ government) and be able to meet the Kiwibuild eligibility criteria?
Who could use those hidden assets to pay for a Kiwibuild or the deposit for one?
Which foreign governments are less than compliant with NZ when it comes to providing financial information on assets held abroad?
Nothing more than immigrants ripping off Kiwi tax payers for subsidised housing while Kiwis are homeless sleeping in station wagons?
"Who would have hidden assets overseas (not looked at by the NZ government) and be able to meet the Kiwibuild eligibility criteria?"
Easy: Someone with a trust.
That is how many pensioners & colleagues go about hiding assets to receive assistance benefits. Expensive lawyers actively encourage it for those looking for beneficial retirement conditions, even when I investigated further there was a clear difference in advice being marketed face to face by paid private lawyers and that separated and cleaned of details on their sites & advertising, aka they provided under the table advice. Not to mention that offered by government or community legal & financial advice being absolutely devoid of any mention of what a good private lawyer would recommend. It literally pays to be able to afford a good lawyer, or should that be the government literally pays you if you can afford a good lawyer to move your assets around (especially if you are likely to have severe company financial hardship or fraud in the near future,... oh there you are Ebert).
Trusts are one mechanism - usually immigration consultants will advise clients to use trusts for holding assets for their immigrant clients. Put all your assets into a trust - we will help you set it up as part of your NZ settlement package, then you can get subsidised education for your children and also accommodation supplement when you rent your house back from your trust, it also helps when you get a pension and lastly you can also apply for this new settlement perk called Kiwibuild - yes NZ tax payers will subsidise a house for you when you buy one using this scheme.
Alternatively there are a lot of immigrants that own houses overseas and in many cases the means to track the ownership of these assets is beyond the ability of the NZ government due to non-compliance by certain governments.
I feel completely dumped on by the NZ governments of the last 20 years!
Greg, what about the fact that some of the Code of Compliance Certificates are for dwellings that will replace exisiting dwellings to be demolished? Core Logic estimates that only 70% of building consents result in a net additional dwelling due to this factor combined with non-completion.
Followed 4auctions over the weekend, none sold
You must be following the wrong auctions....the auctions we followed, more than 4, was 50/50 sold
Exactly the outcome I wanted, a big fat zero is awesome
Awesome because it falls within your worldview propertyprices2fall? Fewer auctions sold ---> pressure on vendors ----> desperate vendors frantically reducing asking prices to avoid FONGO ----> you getting an absolute steal (??)
Yup my Christmas wish
One of the properties that didn't sell has a price that is 31k below rv, for those that like a comparison
How many empty houses are there again? Time for a punitive empty house tax. Kinda suprised Phil hasent brought on in already.
DP
https://www.zerohedge.com/news/2018-11-24/largest-ever-overseas-real-es…
I thought the biggest scam was here in NZ.....promise to deliver Housing, take the Munny and run.
(For Par-liar-ment) But then I guess..I am just a realist. Over paid over indulged and over here. And you believed em.
Nope I always knew Kiwibuild was never going to fly.
Carlos67, with your homes latest spot valuation pinned to your fridge, you're hoping like hell it doesn't.
Carlos67 sold his house some months back. Keep up RP.
Ha-ha-ha :) funny you showed up when I mentioned spot valuations pinned on fridges.
We were short 30,000-40,000 houses 10 years ago. We have always been short this number? Those in the know suggest we have about the right number of houses now. Who are we to do believe. lies, damned lies, and statistics.
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