Fixing Auckland's housing problem
Tue, 24 May 2011 7:00p.m.
To say New Zealand house prices are overvalued is to state the blindingly obvious.
Across the country the median house price is more than five times the median income - anything over three is considered unaffordable.
Last week the International Monetary Fund said New Zealand house prices are overvalued by between 15 and 25 percent based on income.
In Auckland the problem is even worse. With a ratio of over six, the city is less affordable than New York and Los Angeles.
The problem is now so acute that even political enemies share the same concerns.
Neither 30-year-old Labour list MP Jacinda Ardern nor 31-year-old National incumbent Nikki Kaye own their own house.
That's right - despite hefty six-figure incomes, both MPs are still renting.
“It’s pretty tough, particularly being single. You have to work twice as hard to pay the deposit, to pay the mortgage. So my attitude is that I want to make sure I’m very financially secure before I take that step,” says Ms Kaye.
It’s a classic issue of supply and demand.
Demographers say the Auckland region is likely to grow by about 640,000 people over the next 30 years, meaning 300,000 new dwellings will have to be built just to keep up with demand.
That's 10,000 per annum or 27 new houses every day.
So where will all those new houses be built?
Watch the video for the full report.
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26/05/2011 4:56:57 p.m.
richard ward wrote:
Could you give us more info on the 'pod' housing unit.can't find it also on net.You could do a story on it.
26/05/2011 9:54:01 a.m.
The Savings Working Group have pointed out that house prices follow spikes in immigration and that this combined with land restrictions drive the prices up. In addition immigration hasn't helped incomes overall as we need to provide more infrastructure. So while there is a flow on effect as houses are built and more infrastructure perhaps the core economy hasn't kept pace. Our low wages wouldn't matter if our houses were cheaper and we still had those quiet streets?
25/05/2011 11:12:16 p.m.
For info on the pods:
25/05/2011 8:59:22 p.m.
Maybe the reporter should ask the MP's how much of their Salary (130K) they have saved over the last how many years they have been working. They should be getting net 96 000 per year, double that of the average wage. They could easily save 50%. So over their three year term they should have $144,000 K deposit. Plenty. Stop wining and move a few km out from Ponsonby.
25/05/2011 7:49:04 p.m.
robyn McGregor wrote:
Could you please give us some details on the "pod" housing made out of modules that was constructed for about $63,000? I have tried to google it but to no avail Thanks
25/05/2011 11:33:18 a.m.
Further to my comment before - I don't know if you will let this through your moderation, but Sainsbury did a good show a couple of years ago on the ridiculous cost of Akl apartments, including interviewing some American temporary residents who were disgusted at the cost. http://tvnz.co.nz/close-up/shoebox-living-and-you-get-your-rent-5-39-video-3379811So that shows how ridiculous Mike Lee's suggestions are - and all the other Greenie and socialist-planned-economy wallies on his side. They remind me of Marie Antoinette - "your majesty, the peasants can't afford houses"....... "then let them live in multimilliondollar apartments".
25/05/2011 11:27:49 a.m.
Our houses are not high in cost compared to overseas, Austrailia, England, America, etc - it's our wages that have not grown in the last 2-4 years relative to what is being paid overseas for similar jobs. This comes down to being a low skilled labour market which can be blamed on not enforcing qualifications or not wanting to recognise qualifications within the N.Z employment market. This means anyone with any qualification is gonna go overseas and get better paid. We also don't export enough R & D $'s for / to overseas companies. We should be marketing our skills and people to some of the big companies Microsoft, Telco's and development companies, let them into the country and allow us to show them to show the world what we can do. It happens in the movie industry why not any other industry. This will allow for great employment growth and a natural raising of wages to allow people to live and buy a decent roof over theirs and their families heads.
25/05/2011 11:17:44 a.m.
Extraordinary that voters let the politicians like Mike Lee get away with such flimsy excuses. "Cost of infrastructure", etc. How did they ever grow Auckland or any city to the size it is now? How come there are cities several times the size of Akl, in the USA, that still build affordable housing on the fringes, and their economies are among the strongest in the world, and their local taxes among the lowest? The real problem is that the councils have become more and more inefficient and wasteful, and to balance their budgets without raising rates too much, they create "planning gain" (see Wikipedia) that they can gouge a share of via "development contributions". Good luck to them once the house price bubble THEY CREATED, BURSTS. Using local tax revenue (i.e. rates) to fund infrastructure is equitable, and sustainable in practice; as per the many cities around the world much bigger than Akl, that have funded growth that way. This is really "CORE function" of councils and the prime reason for which they existed in the first place. It is not just the people who live in the new homes, who benefit from the infrastructure provided. Look at the capital gains raked in by people who live in more established areas, as the city grows. That is perfectly fair enough. It is not perfectly fair enough to drive up the price of ALL urban land, even at the existing fringe. Who is winning from this racket, and why does nobody care about it? "Land banking" - what a sickening term.Mike Lee is dreaming, thinking people can just live in the existing city at higher density. His policies just made that totally unaffordable. If land was still a sensible price throughout Auckland, living at higher densities in the existing city would be an affordable option to a lot MORE people than it now is. Compare the cost of an apartment in central Auckland, with the same thing in any low-land-price city in heartland USA. Stay on this case, Campbell Live.
25/05/2011 10:47:29 a.m.
More sections is not the answer.This will send the council further into debt.Plus a host of other reasons. A compact city will result in a better variety of housing, walkable neigbourhoods,lower carbon footprint , less dependancy on the car , the old and the young not so disadvantaged(less car dependancy),Our clean green image is under threat due to the high carbon footprint of our cities therfore a compact city reduces this.Our cities are out of balance with mainly urban sprawl and like many American cities of the same are showing debt stress.
24/05/2011 9:41:12 p.m.
Tony Rex wrote:
Is the the cost of housing really too high? I disagree. New Zealand homes on an international camparison are relative mansions. Compare the size of our sections and homes along with their quality and you'll find a less sensationalised storey. If houses are so unafforable then perhaps we need to look at what and how we are building and get real... Do we really need that 3 bedroom home with ensuite and garage as a first home? I'm sure if the party candidates interviewed down graded their wishlist to something more realistic there would be a much larger pool of houses that fitted their income. Buying your first home isn't actually about keeping up with the jones's... Internationally, like for like our house prices are fairly reasonable. If only our income levels were as good as the jones's across the ditch. But then I guess we'd just be kidding ourselves that our economy is actually capable of catching up to our australian friends.
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