Real estate, post COVID-19 level 4 (since 2020)

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#2732559 22-Jun-2021 10:21

Id take anything with a grain of salt, no one knows. Many predictions have proven to be incorrect. And this is a global issue, not a NZ problem caused by NZ actions

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#2734673 25-Jun-2021 19:59

This is worth reading, if depressing.

https://thespinoff.co.nz/business/25-06-2021/bernard-hickey-how-hope-for-a-generation-was-lost/

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#2734822 25-Jun-2021 22:44

maybe if we moved on from being good at farting cows to being good at building things

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#2734827 26-Jun-2021 00:46

Handle9: This is worth reading if depressing.

https://thespinoff.co.nz/business/25-06-2021/bernard-hickey-how-hope-for-a-generation-was-lost/

It's the one thing New Zealand doesn't want to lead the world in. The banks see house prices rising 15% in the next year, which by itself is crazy.

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#2734829 26-Jun-2021 00:50

tdgeek:

Id take anything with a grain of salt, no one knows. Many predictions have proven to be incorrect. And this is a global issue, not a NZ problem caused by NZ actions

Except NZ tops the world as being the worst example. Other countries are nowhere near as bad. We are currently trusting both the government and reserve banks predictions on this, that the changes will have an effect, as they ave said they need to wait and see. But the government didn't follow the treasuries recommendations, such as extending the BL test to 20 years.
But I can only see them kicking the can down the road until mid next year. Interest rates need to rise, as it is that cheap money fueling it, mixed with FOMO and lack of supply. When their is FOMO due to covid, we get a run on both toilet paper and houses.

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#2734857 26-Jun-2021 08:41

mattwnz:

Except NZ tops the world as being the worst example. Other countries are nowhere near as bad. We are currently trusting both the government and reserve banks predictions on this, that the changes will have an effect, as they ave said they need to wait and see. But the government didn't follow the treasuries recommendations, such as extending the BL test to 20 years.
But I can only see them kicking the can down the road until mid next year. Interest rates need to rise, as it is that cheap money fueling it, mixed with FOMO and lack of supply. When their is FOMO due to covid, we get a run on both toilet paper and houses.

Are we the worst for housing? Or that most places suck, we are just number one, so we are all in the same boat? Why is this a Government problem? Why do people exist with a problem then when its too much they want someone else to fix it? Do we expect these changes to fix it in a year? Its too late. Supply won't be fixed in a hurry, and unless Kiwis decide to build their house and bypass the convenience of sign today and move in in 3 weeks, little will change. Interest rates should go up, they are as low as they are due to covid economic recovery measures. Then everyone will complain about that as the innocent people who bought in a rising market with low interest rates cannot cope with increased mortgage repayments, they will probably want to be bailed out by you and me. Key and Clarke talked about this in 2000 or 2001. Nothing has happened. Just like a house that has had maintenance ignored, it will eventually be a huge problem. Thats where we are, too late. It will now be a generational correction, not attending to a minor problem 20 years ago. Who to blame? The people. Building was never unachievable, most people played monopoly and houses rolled over and over with little housing stock impact. But people are people, any change that costs them an extra $10 a week will be frowned upon. Its crazy that we can land probes on comets and asteroids, yet here we are, we can't manage where we live. Even when Tiny Homes hit the news in the last year or two, people bitched about them. Its a solution for some, yet we do what we do best. Do nothing and complain. With mindsets like this, that's the barrier, and many of us are to blame.

My idea is to do the EV feeble on houses. Levy purchases, use that to subsidise builds. Also, levy interest rates on purchases and use that to subsidise interest rates on builds. Seems an easy solution, easy to implement, people need carrots

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#2734876 26-Jun-2021 09:49

We aren't exactly doing great for housing compared to the world :(

https://www.newshub.co.nz/home/money/2021/06/new-zealand-tops-bloomberg-real-estate-risk-rankings-as-oecd-house-prices-reach-unprecedented-levels.html

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#2735385 27-Jun-2021 15:57

Handle9:

This is worth reading, if depressing.

https://thespinoff.co.nz/business/25-06-2021/bernard-hickey-how-hope-for-a-generation-was-lost/

I finally read through that, and you're right, it is very depressing.

tdgeek

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#2735424 27-Jun-2021 17:56

quickymart:

Handle9:

This is worth reading, if depressing.

https://thespinoff.co.nz/business/25-06-2021/bernard-hickey-how-hope-for-a-generation-was-lost/

I finally read through that, and you're right, it is very depressing.

Skimmed through it, will read fully later

But. Why not build? You get a fixed price. You get new. You can choose the colour of the toilet. Yes, building was flash and cool and it costs more. But you add to the housing stock. The other option is playing monopoly where you add new players gradually while the board stays the same. Thats why you and me bid higher to buy Park Lane off Bill. Or Old Kent Road. Ourselves to blame. Building was never locked out for the priviledged. We often talk about the supply issue. We never added to it, that's why

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#2735469 27-Jun-2021 19:26

Part of the problem (as I understand it) is land availability. They sorted this with Christchurch after the earthquakes. Auckland is a different story though. Is it the Government, the Auckland Council or some local body who looks at a vacant plot of land and says, "we're going to allow 300 houses to be built here"?

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#2735475 27-Jun-2021 19:56

Real easy to say “build” - but build what and build it where? Looking at Auckland, empty sections aren’t easy to find unless you want to be in Pokeno or the equivalent up around Silverdale. Not everyone can afford to buy a section with an existing house, bowl it, and build new. Not to mention we should be reigning in the urban sprawl a bit for a variety of reasons, not encouraging it. Not to mention buying empty sections and building can be harder to get lending for.

It’s just not helpful to say “build instead of buy”, I’m sorry.

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Handle9

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#2735477 27-Jun-2021 20:01

quickymart:
Part of the problem (as I understand it) is land availability. They sorted this with Christchurch after the earthquakes. Auckland is a different story though. Is it the Government, the Auckland Council or some local body who looks at a vacant plot of land and says, "we're going to allow 300 houses to be built here"?

It needs to be zones correctly then the owner of the land can apply to subdivide and develop it. That's when the fun begins as the development contributions and costs associated with resource consent can make it uneconomic.

Existing ratepayers have no interest in funding new infrastructure that benefits other people so it effectively becomes a handbrake on development. When you combine it with an existing infrastructure deficit (eg poo running down the streets in Wellington) you end up in a lovely self sustaining circle.

tdgeek

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#2735589 28-Jun-2021 07:14

antonknee:

Real easy to say “build” - but build what and build it where? Looking at Auckland, empty sections aren’t easy to find unless you want to be in Pokeno or the equivalent up around Silverdale. Not everyone can afford to buy a section with an existing house, bowl it, and build new. Not to mention we should be reigning in the urban sprawl a bit for a variety of reasons, not encouraging it. Not to mention buying empty sections and building can be harder to get lending for.

It’s just not helpful to say “build instead of buy”, I’m sorry.

I wasnt suggesting buy bowl and build. Builders seem to be busy, subdivisions seem to pop up everywhere, I think AKL has record consents right now. True, you cant pick what location or street you want and find an empty section, but building happens everywhere, that is the solution.

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#2735594 28-Jun-2021 07:52

Hickey made an interesting point, I think we all know that the lead in time to get enough trades people is about seven years. Others say, bring people in from overseas, but they have to live somewhere too! Which exacerbates the problem!

The message from the podcast was anyone born after 2008 don't bother trying to buy unless your parent's own property. I guess has home ownership rates drop, this will affect more and more kids.

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#2737508 1-Jul-2021 17:35

Megan Woods talks about what the government's doing about the housing situation (following Bernard Hickey's column above):

https://thespinoff.co.nz/politics/01-07-2021/megan-woods-yes-there-is-hope-for-young-nz-generations-seeking-to-buy-a-home/

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