Otago Property Investors Association Inc
No houses are being built for the lowest-income quarter of New Zealand’s population, Finance Minister Bill English told media last week.
His comments are backed up by the Productivity Commission report on housing affordability which noted that the country’s new homes over the past 50 years had tended to be large, expensive houses or top-end apartments.
This week’s building consent data also supports that: The average value of the roughly 1000 consents issued for June in Auckland was $346,000. For the previous five June quarters, it was just under $300,000.
That does not include the cost of the section, which could be expected to add at least the same again, if not 150%.
Since the 1960s, the number of new houses built that would service the bottom quarter of the market has dropped from more than 30% to 5%. The number of new builds for the top end of the market has increased from 10% to 50%.
Property guru Olly Newland cited this problem when he predicted that house prices would double in some parts of New Zealand over the next 10 years.
He said there was nowhere near enough cheap housing being built to cater for the needs of future first-home buyers.
Auckland Property Investors Association president David Whitburn said the best way to encourage developers to build cheap housing was to slash red tape: Significantly reducing development contributions, removing the watercare netwrok infrastructure charge levied on a per water metre basis, removing GST on new builds and building products and having a pro-active council that would make it easy to subdivide by removing land size restrictions.