Real estate, post level 4

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#2835748 20-Dec-2021 07:48

tdgeek:

You're right, but it was already done before Covid came along, then we had the uber low interest rates. Bag Kiwibuild as much as you like but where was the Kiwibuild from National in the previous 9 years?

It was called 'Axis' and run in conjunction with the HLC, it balloted off hundreds of affordable homes and was slated to go into effect at Northcote until the government changed and then everything went on hold waiting for Kiwibuild, which never really happened and basically just ended up duplicating what Axis already was.

https://axisseries.co.nz/

I know this existed because I spent years trying to get a house through the ballots. But it's far easier to pretend that National 'did nothing' when in reality National 'doing nothing' was far more substantive than the over-hyped and woefully planned Kiwibuild that was supposedly going to save us all.

Nice attempt at misdirection though, doesn't change the fact that Labour used Kiwibuild as a platform to attack the government for decades and then it turned out it was entirely impossible when they actually had to follow through on it, and then decided to outbid FHBs buying from developers to build up their own state housing stock because it took them years to get their own builds online. How's the UNITEC development coming along again?

quickymart

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#2835751 20-Dec-2021 07:55

Those are actually really good prices, I'd be happy to pay that amount. Hobsonville is quite a way away from where I am, though.

tdgeek

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#2835756 20-Dec-2021 08:04

GV27:

It was called 'Axis' and run in conjunction with the HLC, it balloted off hundreds of affordable homes and was slated to go into effect at Northcote until the government changed and then everything went on hold waiting for Kiwibuild, which never really happened and basically just ended up duplicating what Axis already was.

https://axisseries.co.nz/

I know this existed because I spent years trying to get a house through the ballots. But it's far easier to pretend that National 'did nothing' when in reality National 'doing nothing' was far more substantive than the over-hyped and woefully planned Kiwibuild that was supposedly going to save us all.

Nice attempt at misdirection though, doesn't change the fact that Labour used Kiwibuild as a platform to attack the government for decades and then it turned out it was entirely impossible when they actually had to follow through on it, and then decided to outbid FHBs buying from developers to build up their own state housing stock because it took them years to get their own builds online. How's the UNITEC development coming along again?

Calm down. You spent years trying to get one of those? Thats hardly a way forward if they are hard to get. Didn't seem to affect house prices though, although its strange that houses are unaffordable but at Axis they are very affordable?

The bottom line is no Govt did anything as regards house prices or builds. Hence they evolved to be unaffordable. And when they are unaffordable, no efforts to get FHB's into affordable houses will now work

GV27

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#2835757 20-Dec-2021 08:04

quickymart:

Those are actually really good prices, I'd be happy to pay that amount. Hobsonville is quite a way away from where I am, though.

It was, pre-boom, a pretty graduated system literally at the same price points as the Kiwibuild policy - so $650K got you a 3/4 bedroom home.

There were some extras you had to cover off post-move-in (Alarm I think, plus TV aerials) but other than that, it was pretty much turnkey.

Kiwibuild was priced under this, pre-election, from memory, and despite being repeatedly challenged on costings, they were soon adjusted after the election to be literally the same. All that happened is a bunch of people's time got wasted, and to ballot houses that were already being built anyway at the same price levels.

GV27

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#2835761 20-Dec-2021 08:11

tdgeek:

Calm down. You spent years trying to get one of those? Thats hardly a way forward if they are hard to get. Didn't seem to affect house prices though, although its strange that houses are unaffordable but at Axis they are very affordable?

The bottom line is no Govt did anything as regards house prices or builds. Hence they evolved to be unaffordable. And when they are unaffordable, no efforts to get FHB's into affordable houses will now work

They were affordable because the regime they were granted planning permission under, which was initially proposed by Labour and sped up by John Key's Govt (you know, the ones that did nothing) specified that an affordable housing program should be required to get developments off the ground through a specific and streamlined process. Hence why there were dozens, possibly hundreds of affordable houses balloted at Hobsonville.

Why is the catastrophic failure and explosion of house prices under the current government swatted away with 'well, no government did anything' when it is a) patently untrue and b) not something that stopped themselves using their own supposedly superior plans as an attack platform for years, and then quietly walking away from them hoping no one would notice? Why is it so hard for people to just accept they got something wrong and they need to be held accountable for it?

GV27

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#2835763 20-Dec-2021 08:18

And finally 'calm down' - with all due respect, it's a little bit personal for those of us who waited and waited and waited for an affordable state housing program to be followed through on and almost got frozen out of home ownership like I did. If I'd been able to buy in 2017, when the election happened, instead of waiting for something Labour had no meaningful plans to actually deliver on, I wouldn't be facing a huge portion of my income being mopped up by the minimum repayments on my mortgage, or having to put off having a family as long as I did.

This stuff has real, actual impacts on people's lives. Telling them to 'calm down' when you're the demographic living with the consequences for the next 35 years (longer, given I will be working well past 65 to pay down massively inflated mortgage) isn't going to go down well.

tdgeek

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#2835768 20-Dec-2021 08:28

GV27:

And finally 'calm down' - with all due respect, it's a little bit personal for those of us who waited and waited and waited for an affordable state housing program to be followed through on and almost got frozen out of home ownership like I did. If I'd been able to buy in 2017, when the election happened, instead of waiting for something Labour had no meaningful plans to actually deliver on, I wouldn't be facing a huge portion of my income being mopped up by the minimum repayments on my mortgage, or having to put off having a family as long as I did.

This stuff has real, actual impacts on people's lives. Telling them to 'calm down' when you're the demographic living with the consequences for the next 35 years (longer, given I will be working well past 65 to pay down massively inflated mortgage) isn't going to go down well.

You did say that you tried for a long time on a ballot and presumably no result. And not a lot of help if its just in one area in one town in NZ. If that makes it a great scheme to solve NZ housing issues, then thats good.

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GV27

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#2835776 20-Dec-2021 08:53

tdgeek:

You did say that you tried for a long time on a ballot and presumably no result. And not a lot of help if its just in one area in one town in NZ. If that makes it a great scheme to solve NZ housing issues, then thats good.

I think we went through around sixteen ballots with no result, but there were hundreds trying to do the same. And while it was in one area, it was a workable affordability program in the city that needed the most support with affordability at the time, with a view to expanding it. Presumably at some point, this would have also been beyond Auckland.

So yes, not widespread, but I'd argue more honest than the government buying homes from already existing and underway developments to frontload into a FHB program and pretending it was adding housing supply, or the state house agency outright competing with FHBs to add more capacity to their housing stock.

MikeAqua

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#2836006 20-Dec-2021 14:43

I think if it was possible for homes to be built affordably by anyone in NZ, someone would be doing it. Business finds a way to make things cheaper - everything from cars, to clothes pegs. Smith's invisible hand etc. It's difficult, expensive and slow to create residential sections, building materials are expensive, labour is expensive and now in short supply, and regulatory costs of building are very high. Anyone who can build affordable housing in these circumstances can probably walk on water too..

I don't think the blame for this can be squarely sheeted home to any particular govt. My house(s) have increased in value rapidly from time to time under Clark, Key, English and Ardern govts. Govts just seem to tinker. The current govt did empty half the clip into heir foot by turning the tap off on migrant workers. We now have an aging resident /citizen population and many industries are seriously short of labour - including building to a point where it is impacting production.

A good friend of mine is a COO in residential housing. H ahs some serious concerns about the sector. Rising costs and supply problems with labour and materials, mean that builders are unable to get houses to payment milestones, so banks won't release funds and there is a serious risk of waves of building firms going bust.

He also made an interesting comment about Kainga Ora: That they want houses built to the Homestar standard, which exceeds the building code, but want to pay bargain basement prices for those houses. His firm no longer deals with KO.

I can't follow the logic. Any house that meets the current building code, would be a joy to live in compared to most of the rental stock around the place. Anyone who moves from a below average rental property into a new home is significantly improving their housing.

Mike

mattwnz

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#2836047 20-Dec-2021 15:59

MikeAqua:

I think if it was possible for homes to be built affordably by anyone in NZ, someone would be doing it. Business finds a way to make things cheaper - everything from cars, to clothes pegs. Smith's invisible hand etc. It's difficult, expensive and slow to create residential sections, building materials are expensive, labour is expensive and now in short supply, and regulatory costs of building are very high. Anyone who can build affordable housing in these circumstances can probably walk on water too..

I don't think the blame for this can be squarely sheeted home to any particular govt. My house(s) have increased in value rapidly from time to time under Clark, Key, English and Ardern govts. Govts just seem to tinker. The current govt did empty half the clip into heir foot by turning the tap off on migrant workers. We now have an aging resident /citizen population and many industries are seriously short of labour - including building to a point where it is impacting production.

A good friend of mine is a COO in residential housing. H ahs some serious concerns about the sector. Rising costs and supply problems with labour and materials, mean that builders are unable to get houses to payment milestones, so banks won't release funds and there is a serious risk of waves of building firms going bust.

He also made an interesting comment about Kainga Ora: That they want houses built to the Homestar standard, which exceeds the building code, but want to pay bargain basement prices for those houses. His firm no longer deals with KO.

I can't follow the logic. Any house that meets the current building code, would be a joy to live in compared to most of the rental stock around the place. Anyone who moves from a below average rental property into a new home is significantly improving their housing.

We need to look at why NZ material prices are so much more in NZ compared to other countries, when we produce many of these materials. Drywall is one example, but we also grow timber here, but send much of it offshore for processing.

The building standards are always being improved on. The new insulation standards coming for roof/ceiling insulation and double glazing for example could add a lot to the cost of a home. IMO if KO want houses built to homestar standards then they should be the baseline standards of the building code, otherwise why have two different standards? . They are designed to last a minimum of 50 years, but many houses less than 50 years that are being lived in or used as rentals are not healthy homes to live in.

quickymart

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#2836081 20-Dec-2021 17:50

Just a quick thought, would pre-fabricated/pre-built houses imported into the country and simply plopped onto the ground make any difference to the price? I did see an article about it a while ago as saying it could help with the housing crisis, or are those houses a piece of crap?

heavenlywild

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#2836085 20-Dec-2021 18:09

The main issue is the price of land. For 400m2 in Auckland it can be as high as 800k or higher. Bringing in a pre-built house, it still won't be affordable IMO.

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mattwnz

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#2836104 20-Dec-2021 19:09

heavenlywild: The main issue is the price of land. For 400m2 in Auckland it can be as high as 800k or higher. Bringing in a pre-built house, it still won't be affordable IMO.

Yes. Infact much of the house price increases is based on the land increasing in value rather than the dwelling itself. This has meant that land prices have more than doubled in a year an many places in NZ. In my town they went for about 270k in 2020, up to 600k in 2021. But I have noticed land sales have stalled recently, and that maybe because people can't get builders..

This 3 story town house intensification in the main centres may help with this. But IMO we need to be releasing more land and taxing land bankers to the hilt to release their land. There are pieces of land that could be built on, and has been zones as residential land in district plans for housing, but the landowners have no intention of selling. If they rated them what they would get in rates if that land had been developed, then that may force some to release their land.

heavenlywild

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#2836107 20-Dec-2021 19:39

The townhouses in Auckland, newer ones, go for 1.3m as well.

You can't stop builders or owners from making a profit based on market value. Intensification will not drive down prices when people want to make a healthy profit. That there, is reality and why changes won't make a material difference especially in highly sought after places in Auckland.

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mattwnz

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#2836129 20-Dec-2021 21:05

heavenlywild: The townhouses in Auckland, newer ones, go for 1.3m as well.

You can't stop builders or owners from making a profit based on market value. Intensification will not drive down prices when people want to make a healthy profit. That there, is reality and why changes won't make a material difference especially in highly sought after places in Auckland.

There are different types of townhouses, but if you mean the ones without land, then they are more like apartments. They sell for 1.3 million essentially because that is what people are willing to pay, or the banks are willing to lend on. New builds also need a smaller deposit making them easier to buy. But they are a different proposition to a townhouse that is standalone and on it's own freehold piece of land and hopefully no covenants. These things do go in cycles though. With rising interest rates, people can't afford to pay as much, and with supply catching up, the RB governor has said that he expects prices to come off, and he is the one who puts the interest rates up.

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