P Goff Article

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TeaLeaf

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#201956 11-Sep-2016 16:41

I like the quotes re building infrastructure well before housing like Germany and building satellite cities, which I personally think is the ultimate way to avoid Aucklands demise. But whether he does anything about the housing bubble or how to get it back to a figure resembling the pre bubble yearly averages I dont know. Tiring watching the government, first the GFC, avoid the crash by inserting $, we should have accepted the fall then and there like everyone else imo. Secondly this concept of immigration boosting house prices, where is the guy earning $600 a week to keep your sewerage working meant to live? Ie industries already priced out of living in Auckland like they say has happened to London. I like to hear his thoughts on these kinds of issues.

Will he be a good Mayor? I know nothing of him as I avoid reading the political news, but this article did spark an interest.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11706915

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#1627495 11-Sep-2016 16:56

One of the main headings of the article, is that he has been married to the same person for 45 years. You have to love our media. Not sure a mayor can really make much difference by themselves. But I would like to see a limit of 2 terms placed on all mayors in NZ. Some regions can literally have mayors for decades, and they can be impossible to shift, as it is down to their name being well known.

Where is a lower wage person supposed tro live? Well the unitary plan allows for higher intensive housing, so developers will be building shoebox housing for them to live in, and banks will be willing to lend 700k to them to buy their shoebox.

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TeaLeaf

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#1627496 11-Sep-2016 17:04

Haha yeah is funny, but hey good on him for that length of time.

I dunno, I kind of agree with the terms, but what if a mayor is really good, sad to lose someone with vision just because of a time constraint. I personally would rather this apply to Prime Minister like presidency in the states than local government.

Yes you paint a bleak outlook on housing when you spell it out like that, $600 a week, lent $700k, how long will they have to push mortgages out for that to work, 100 years? Oh he died oops.

Found this to answer my question on his thoughts anyway, most of I like.

http://www.forabetterauckland.org.nz/policies/2016/8/27/restoring-housing-affordability

Geektastic

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#1627778 12-Sep-2016 10:55

We need a long, hard look at just why (a) it costs so much and (b) it takes so long to build a house in NZ compared to many other places.

Everyone is happy to blame the government, the GFC, Apple for not paying tax, overseas sellers for not paying GST or whatever the bete noir of the day is - yet no one ever takes a cold hard look at the builders, how much they are charging and the building supplies companies who charge 3 or 4 times what the same materials cost in Australia, USA etc.

Combine that with the ponderous speed and complete lack of long term planning by councils and you can soon see why we have far too few houses, which makes them cost more.

Not much of a Goff fan myself but the satellite city and the infrastructure are both things I have suggested several times here.

A further infrastructure example is commonly found in France: when they build a road bridge you will often see that the bridge is built to accommodate 2 lanes in each direction even when the road it serves is a single lane in each. This is so that in due course when traffic flows require converting that road to a dual carriageway, they do not have to tear down and rebuild an expensive bridge!

Linuxluver

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#1627787 12-Sep-2016 11:12

TeaLeaf:

I like the quotes re building infrastructure well before housing like Germany and building satellite cities, which I personally think is the ultimate way to avoid Aucklands demise. But whether he does anything about the housing bubble or how to get it back to a figure resembling the pre bubble yearly averages I dont know. Tiring watching the government, first the GFC, avoid the crash by inserting $, we should have accepted the fall then and there like everyone else imo. Secondly this concept of immigration boosting house prices, where is the guy earning $600 a week to keep your sewerage working meant to live? Ie industries already priced out of living in Auckland like they say has happened to London. I like to hear his thoughts on these kinds of issues.

Will he be a good Mayor? I know nothing of him as I avoid reading the political news, but this article did spark an interest.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11706915

Goff will be far better than any of the low-tax, city-rotting, privatising, public-asset-grabbing proxies of the right (Palino, Thomas, Crone).

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Batman

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#1627797 12-Sep-2016 11:26

Geektastic:

We need a long, hard look at just why (a) it costs so much and (b) it takes so long to build a house in NZ compared to many other places.

Everyone is happy to blame the government, the GFC, Apple for not paying tax, overseas sellers for not paying GST or whatever the bete noir of the day is - yet no one ever takes a cold hard look at the builders, how much they are charging and the building supplies companies who charge 3 or 4 times what the same materials cost in Australia, USA etc.

Combine that with the ponderous speed and complete lack of long term planning by councils and you can soon see why we have far too few houses, which makes them cost more.

Not much of a Goff fan myself but the satellite city and the infrastructure are both things I have suggested several times here.

A further infrastructure example is commonly found in France: when they build a road bridge you will often see that the bridge is built to accommodate 2 lanes in each direction even when the road it serves is a single lane in each. This is so that in due course when traffic flows require converting that road to a dual carriageway, they do not have to tear down and rebuild an expensive bridge!

I can tell you why, we have a shortage of competition of tradespersons and building material suppliers.

I have tried to get - roofer, plumber, electrician, builders, etc to do jobs around the house. Half of them never get back to me, the other half tell me straight off they are not interested. This is a year after people started quoting me exorbitant rates, they now just can't be bothered! I am still waiting for something to happen to the economy so that I can get those jobs actioned!

Linuxluver

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#1627798 12-Sep-2016 11:27

Geektastic:

We need a long, hard look at just why (a) it costs so much and (b) it takes so long to build a house in NZ compared to many other places.

Easy....all the components that go into building anything here cost a lot more than in larger markets. I once tried to make a video camera motion-reducing frame with the US$5 worth of cheap, PVC plumbing parts described in YouTube video. I went to Mitre 10. I found all the parts. But I stopped counting at NZ$200.

That's why everything here is so expensive..and it's the same reason it has always been: we are small remote market who make almost nothing ourselves and we import (relatively) small volumes of a wide variety of things and add huge markups in order to return a profit.

We did try to use tariffs to allow local manufacturing to survive, but then we had a very limited range of things to buy as it wasn't economic to offer huge ranges of products in such a tiny market....and they cost a lot anyway because relatively few items had to support all the people involved in making, distributing and selling them.

We can't get way from it. We're small and remote.

Everyone is happy to blame the government, the GFC, Apple for not paying tax, overseas sellers for not paying GST or whatever the bete noir of the day is - yet no one ever takes a cold hard look at the builders, how much they are charging and the building supplies companies who charge 3 or 4 times what the same materials cost in Australia, USA etc.

All true. In the past, to achieve economies of scale, the government often became the provider of goods and services....and did so more or less at cost. In a small country like NZ this seems to me to be the most rational and effective model where infrastructure is concerned. But for it work it needs to operate in an open and accountable environment....and avoid capture by sectoral and vested interests.

Combine that with the ponderous speed and complete lack of long term planning by councils and you can soon see why we have far too few houses, which makes them cost more.

Some of that regulation is require because there are so many cheaters.....and many of them are very smart cheaters. Many of the cheaters publicly moan about tax money "wasted" on the public servants whose job it is to catch the cheaters. Nice.

I suspect the Council processes would operate much more quickly if we paid people more and hired more of them.....and they discouraged the cheaters.

We have a housing crisis now mainly because of this government's immigration policy keeping the bubble pumped up...and because they have a silent policy of running down state housing so the private sector can fail - again - to do the job. Last I read there were about 2,500 state houses sitting empty. Deliberately. This sort of failure is WHY government got into the housing business back in the 1930s.

Not much of a Goff fan myself but the satellite city and the infrastructure are both things I have suggested several times here.

A further infrastructure example is commonly found in France: when they build a road bridge you will often see that the bridge is built to accommodate 2 lanes in each direction even when the road it serves is a single lane in each. This is so that in due course when traffic flows require converting that road to a dual carriageway, they do not have to tear down and rebuild an expensive bridge!

Yeah. Many countries build for the future. Unfortunately, in NZ, the left tend to think that way but the Right penny pinch and choke the future. Like building a 4-lane Auckland Harbour Bridge in the late 50s and 15 years later having to add the 4 extra lanes required and many times the original cost. Similarly the City Rail Link in Auckland that could have been running now for the past 40 years if Muldoon's National party government hadn't killed it. Or the expensive "Overseas Terminal" built in Wellington in 1964 for passenger ships at the very moment passenger ships passed into history thanks to air travel. They were warned, too.

The people who do the damage are very clear in hindsight: the visionless, imagination-free politicians of the Right who reluctantly build for yesterday if they build anything at all.

It's Goff....... or more of that, whether 'that' is Palino, Crone or Thomas.

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darylblake

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#1627801 12-Sep-2016 11:30

The biggest problem with picking a mayor is you only really know what you are gonna get, the only sure bet is Goff, the rest are gonna be harder to pick. I am most definitely NOT Voting for Goff.
Local council is an absolute joke, the whole organisation is very poorly run. And trying to call them up to get info or do anything is a nightmare as well.

Geektastic

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#1627945 12-Sep-2016 15:45

Linuxluver:

Geektastic:

We need a long, hard look at just why (a) it costs so much and (b) it takes so long to build a house in NZ compared to many other places.

Easy....all the components that go into building anything here cost a lot more than in larger markets. I once tried to make a video camera motion-reducing frame with the US$5 worth of cheap, PVC plumbing parts described in YouTube video. I went to Mitre 10. I found all the parts. But I stopped counting at NZ$200.

That's why everything here is so expensive..and it's the same reason it has always been: we are small remote market who make almost nothing ourselves and we import (relatively) small volumes of a wide variety of things and add huge markups in order to return a profit.

We did try to use tariffs to allow local manufacturing to survive, but then we had a very limited range of things to buy as it wasn't economic to offer huge ranges of products in such a tiny market....and they cost a lot anyway because relatively few items had to support all the people involved in making, distributing and selling them.

We can't get way from it. We're small and remote.

Everyone is happy to blame the government, the GFC, Apple for not paying tax, overseas sellers for not paying GST or whatever the bete noir of the day is - yet no one ever takes a cold hard look at the builders, how much they are charging and the building supplies companies who charge 3 or 4 times what the same materials cost in Australia, USA etc.

All true. In the past, to achieve economies of scale, the government often became the provider of goods and services....and did so more or less at cost. In a small country like NZ this seems to me to be the most rational and effective model where infrastructure is concerned. But for it work it needs to operate in an open and accountable environment....and avoid capture by sectoral and vested interests.

Combine that with the ponderous speed and complete lack of long term planning by councils and you can soon see why we have far too few houses, which makes them cost more.

Some of that regulation is require because there are so many cheaters.....and many of them are very smart cheaters. Many of the cheaters publicly moan about tax money "wasted" on the public servants whose job it is to catch the cheaters. Nice.

I suspect the Council processes would operate much more quickly if we paid people more and hired more of them.....and they discouraged the cheaters.

We have a housing crisis now mainly because of this government's immigration policy keeping the bubble pumped up...and because they have a silent policy of running down state housing so the private sector can fail - again - to do the job. Last I read there were about 2,500 state houses sitting empty. Deliberately. This sort of failure is WHY government got into the housing business back in the 1930s.

Not much of a Goff fan myself but the satellite city and the infrastructure are both things I have suggested several times here.

A further infrastructure example is commonly found in France: when they build a road bridge you will often see that the bridge is built to accommodate 2 lanes in each direction even when the road it serves is a single lane in each. This is so that in due course when traffic flows require converting that road to a dual carriageway, they do not have to tear down and rebuild an expensive bridge!

Yeah. Many countries build for the future. Unfortunately, in NZ, the left tend to think that way but the Right penny pinch and choke the future. Like building a 4-lane Auckland Harbour Bridge in the late 50s and 15 years later having to add the 4 extra lanes required and many times the original cost. Similarly the City Rail Link in Auckland that could have been running now for the past 40 years if Muldoon's National party government hadn't killed it. Or the expensive "Overseas Terminal" built in Wellington in 1964 for passenger ships at the very moment passenger ships passed into history thanks to air travel. They were warned, too.

The people who do the damage are very clear in hindsight: the visionless, imagination-free politicians of the Right who reluctantly build for yesterday if they build anything at all.

It's Goff....... or more of that, whether 'that' is Palino, Crone or Thomas.

Certainly there are issues. This is a quite from an article on Newshub

"A 3D investigation has uncovered a whole range of practices in the building industry keeping New Zealand prices high, from perk trips for builders to exclusive stocking deals at hardware chains.

By 2020 the value of building in New Zealand will top $200 billion, with hundreds of thousands of new homes and apartments.

But the very idea of home ownership has become a pipe dream for many thousands of people, especially those living in Auckland.

Kiwis are paying so much for building materials – the building blocks like timber, concrete and plaster – contributing to ballooning costs.

Tony Sewall, head of Ngai Tahu Property, the biggest developer in the South Island, has sent teams around the world to investigate building material prices.

"We'd be paying around 30 percent more than in Australia, probably 60 percent more than the United States," he says. "And the United States' product is better."

The latest Quotable Value statistics tell us $280,000 to $312,000 will build you a medium home in New Zealand. In Australia it's much cheaper – an equivalent house will set you back $260,000 to $280,000.

"We need to open up the New Zealand market to the international one," says Mr Sewall. "If there's a product that's being used on a building here, the builder should have choice from all around the world. That will keep the competitive tension up and keep the pricing at the right level."

Bunnings New Zealand blames transport costs and our small population, but there's a myriad of things industry insiders say are pushing up prices.

There are exclusive deals between some suppliers and big hardware chains to stock only one brand of product, so there's no choice for the consumer. And then there are also kickbacks and rebates – rewards designed to keep builders loyal to a particular type of product.

The Government was concerned enough about these deals that it investigated.

"We have to ask some questions around some of the businesses that go on in terms of rebates and discounts that go on within the industry," said Housing Minister Nick Smith two years ago.

When he says rebates he's talking about anything from trips overseas to cash-back loyalty bonuses.

Confidential briefing notes given to the minister show the practice is "widespread" and give the example of "a trip to Fiji as a reward".

It also shows the Government considered forcing builders and suppliers to disclose their perk deals, but in the end enforced transparency was considered too hard and too expensive.

But some shops get paid money to stock only one brand of product.

Mitre 10 wouldn't comment on specific arrangements, but confirmed it has what it called "national suppliers for some products".

It was the same story at the hardware chain, ITM, where 3D Investigates found nothing else but Gib plasterboard.

Some of the rebate bonuses for sole stocking can mean big money, in the hundreds of thousands of dollars.

When it came time for the Government to decide who would supply plasterboard to the Christchurch rebuild, the contract went to Gib and a major German firm, Knauf. The Government said it would help improve competition.

But within a year, the German company ran into problems. There were resignations and the company announced it was reviewing its New Zealand operations. The world's second biggest supplier of plasterboard simply couldn't gain traction in a market dominated by Fletcher Building.

In fact, Fletcher's share of the New Zealand plasterboard market is 94 percent. After several complaints, including from Knauf, the Commerce Commission investigated.

It found evidence of aggressive market behaviour, but no illegal, anti-competitive practice.

But official MBIE briefing notes for the Commerce Minister from February this year, well after the Commerce Commission's decision, warn the building sector could be susceptible to cartel-like behaviour and that aggressive market tactics do "curtail competition in the supply of alternative wallboard".

It went on to say the "comparatively high cost of wallboard in New Zealand is having an impact on the cost of construction".

So how do you build a cheap home, how do you get around the lack of competition?"

Linuxluver

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#1627982 12-Sep-2016 16:22

darylblake:

The biggest problem with picking a mayor is you only really know what you are gonna get, the only sure bet is Goff, the rest are gonna be harder to pick. I am most definitely NOT Voting for Goff.
Local council is an absolute joke, the whole organisation is very poorly run. And trying to call them up to get info or do anything is a nightmare as well.

I've had no problems with the local Council unless I called to ask them about something they don't actually do.

You're best to write to Councils. My experience on phone conversations in business or government is that if you don't back it up in writing with a letter then it never happened. Some people are slow to learn this...and they then blame the Council.

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Linuxluver

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#1627984 12-Sep-2016 16:31

Geektastic:

But official MBIE briefing notes for the Commerce Minister from February this year, well after the Commerce Commission's decision, warn the building sector could be susceptible to cartel-like behaviour and that aggressive market tactics do "curtail competition in the supply of alternative wallboard".

It went on to say the "comparatively high cost of wallboard in New Zealand is having an impact on the cost of construction".

So how do you build a cheap home, how do you get around the lack of competition?"

94% market share.....but no problem. Sounds like the rugby union investigating their own players on the matter of the "unreliable" stripper.

There are cheaper ways to build a house: get the whole lot built overseas (China) and shipped in modules that are then bolted together on site in 4 days. A defacto lego house. 3 bedrooms and one bathroom for maybe $200,000......in 3 months.

Modular pre-fab homes built in China and shipped here for assembly. Here's a Youtube video. The last minute is the best.....but watch it all to follow the flow.

They reckon they can build a reasonable house for between $100K and $200k. Would you like chrome door knobs or brass? A Swedish light timber look or something darker? They are built to have thermal mass and be warm, collect rain water and are pre-plumbed and pre-wired. The modules have already been approved to NZ standards, so no compliance issues.

Much as I hate to say it, maybe this is how we break through the building cartels.

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SepticSceptic

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#1627986 12-Sep-2016 16:41

Just as a comparison, a member of my family and her husband have purchased a new 4 bdrm, 2 bath, 2 story brick veneer home, double entry garage, complete with driveway, fences, lawns etc, for US215,000 (just under NZ300,000). 450sqm land. North Carolina

10 mins away from a major shopping centre.

A rental on the same street is US$230 ($NZ314)weekly. Same specs.

We're stuffed ..:-(

Linuxluver

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#1627999 12-Sep-2016 17:21

SepticSceptic:

Just as a comparison, a member of my family and her husband have purchased a new 4 bdrm, 2 bath, 2 story brick veneer home, double entry garage, complete with driveway, fences, lawns etc, for US215,000 (just under NZ300,000). 450sqm land. North Carolina

10 mins away from a major shopping centre.

A rental on the same street is US$230 ($NZ314)weekly. Same specs.

We're stuffed ..:-(

What property taxes do they pay?

Usually when house prices are low, you find the property taxes are three or four times what they are in NZ.

For example, my sister owns a house in Ottawa that was worth about $325K 2 years ago. At that time, her rates on that house were about $3,500 / year....whereas my rates in Auckland on a house worth twice as much (2 years ago) were half what she was paying.

My father in Toronto owned a house there worth over a million...and his rates were about $10,000 / year.....whereas a house in Auckland worth a million then (2 years ago) were about $2,500......if that.

One factor limiting house price inflation is how taxes, in particular, soak up disposable income. So even if the mortgage interest rates in Ontario (Canada) are 2.5%, house prices don't rise as much as here because the property taxes there are 400% of what we pay.

Thinking about that.....I'd much rather the money went the Coucil for services than to a bank for returns to overseas shareholders. People who moan about high rates are clueless, in a way. if they really were high, housing prices would be much lower.

For a real-world example.....look at the homes on lease land at Cornwall Park. Beautiful homes. Worth $2 million on one side of Wheturangi Rd. But on the leased land side of the road the same home is worth maybe $230,000. Why? Because the land lease costs $40,000 / year.

The mechanics are simple. Housep rices are too high because our rates are far too LOW......not too high.

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mattwnz

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#1628003 12-Sep-2016 17:27

joker97:

Geektastic:

We need a long, hard look at just why (a) it costs so much and (b) it takes so long to build a house in NZ compared to many other places.

Everyone is happy to blame the government, the GFC, Apple for not paying tax, overseas sellers for not paying GST or whatever the bete noir of the day is - yet no one ever takes a cold hard look at the builders, how much they are charging and the building supplies companies who charge 3 or 4 times what the same materials cost in Australia, USA etc.

Combine that with the ponderous speed and complete lack of long term planning by councils and you can soon see why we have far too few houses, which makes them cost more.

Not much of a Goff fan myself but the satellite city and the infrastructure are both things I have suggested several times here.

A further infrastructure example is commonly found in France: when they build a road bridge you will often see that the bridge is built to accommodate 2 lanes in each direction even when the road it serves is a single lane in each. This is so that in due course when traffic flows require converting that road to a dual carriageway, they do not have to tear down and rebuild an expensive bridge!

I can tell you why, we have a shortage of competition of tradespersons and building material suppliers.

I have tried to get - roofer, plumber, electrician, builders, etc to do jobs around the house. Half of them never get back to me, the other half tell me straight off they are not interested. This is a year after people started quoting me exorbitant rates, they now just can't be bothered! I am still waiting for something to happen to the economy so that I can get those jobs actioned!

Not only that but they charge such huge amounts. I know someone who just wanted to get their gas heater checked/services. The plumber/gas fitter came, and used an air compressor to clean it out. Was literally a 15 minute job, and cost $120 bucks.

I can relate about roofers. Tried to get a quote for a high spec new roof. One said they couldn't quote due to too much work, okay fair enough. Another quoted 3 times more than the only other quote I got. I am still waiting to hear back from another company, as I required 3 quotes. It is such hard work.

eracode

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#1628021 12-Sep-2016 17:36

I know a guy who is a senior manager in a major residential building company. Last year he and his wife were shouted a trip to the Rugby World Cup in the UK - by Fletchers. They were in a group with other Kiwis from similar circs - all shouted by Fletchers. Presumably this was a 'reward' for specifying Fletcher building materials in the homes they build.

Surely this is bordering on corruption.

Sometimes I just sit and think. Other times I just sit.

wally22

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#1628068 12-Sep-2016 18:32

eracode:

I know a guy who is a senior manager in a major residential building company. Last year he and his wife were shouted a trip to the Rugby World Cup in the UK - by Fletchers. They were in a group with other Kiwis from similar circs - all shouted by Fletchers. Presumably this was a 'reward' for specifying Fletcher building materials in the homes they build.

Surely this is bordering on corruption.

Fletchers (through PlaceMakers) operate a loyalty points system similar to the likes of Countdown, then offer them the cash out rate OR a Cheeeeep excursion like you mention. Its only cheap as they use their leverage to get it that way by booking 100 or more people at once. And the builders use their points to "buy" the trip.

IMHO there is no corruption operating on this. Its just that the sums that the builders spend with PlaceMakers are vast, so the rewards accumulate more rapidly than they would doing a weekly $200 shop at the supermarket.

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