Housing Crisis What Housing Crisis?

[Glenn]

He said the only way to sort out most problems was to address the root cause - in this case, supply. So part of the answer was to put a glut of affordable houses on the market.
Both the number and the type of houses being built were not addressing the problem.
Those houses were for the higher end of the market, he said.

What I would like to know is what other people think is the reason for small cheaper dwellings not being built.
Key thinks first home buyers should buy them.
Nick wants to skew the market towards them.
English wants us to avoid buying them.
Gould is clever enough to figure out that not many are being built.
In my city we are not normally allowed to built minor dwellings.
So some experts in power are saying keep away from the small stuff.
Whilst other experts are saying hello where did the little ticky tacki little houses on the hill all go.

[Bobsyouruncle]

Has always amazed me the disparity in NZ and say the USA. I know it's a much bigger market but glass is glass, concrete is concrete. WE can build "cheap" for $645 USD a square metre. Really high spec around a thousand. Why is NZ so expensive?

[motivated]

Glenn its all about land developers, restiricted land supply (blame local bodies for this part) and council development contibutions
Developers aim for higher end sale price homes as their margins are higher, their land development costs and council costs are similar whether its for a top end site or budget site. Why would they want to sell sections cheap when they can sell them for better prices further up the market

[flyernzl]

Knew a chap who bought land at the back of Long Bay (Auckland).
Then it took him 10 years to get to the point where he was allowed to build.
So by then he was forced to build million dollar houses in order to cover his accumulated costs from over that holding period.
Every days delay = costs that must eventually be recovered.

[Glenn]

Knew a chap who bought land at the back of Long Bay (Auckland).
Then it took him 10 years to get to the point where he was allowed to build.
So by then he was forced to build million dollar houses in order to cover his accumulated costs from over that holding period.
Every days delay = costs that must eventually be recovered.

Yes sure all true. A very experienced person I know is developing Richmond West in Tasman Nelson. He was delayed for 12 years by the Council officers he says.
But he is the property developer not the builder of houses.
In the 70's when I first came to Nelson there was a terrible shortage of rentals. This was the times of rent freezes, capital gains, and many other interventions in the market. So suddenly the bung got pulled and lots of blocks of rental flats were built. I own a few of those blocks now. But these days no one is building blocks of flats in our area. Sure there are a few high end comprehensive developments but not blocks of sausage style concrete block basic homes with three to six flats on 1000m. I used to do demographic studies for the Telecom company (Post Office) those days. From what I remember most were coming through as declared rental units. There was a big rush in the 90's to split up the ownership of those blocks and create separate titles for them so they could be sold off individually.
As mentioned if you call the blocks comprehensive developments and or SHA's you can still do it but no one seems to be doing them as new rental units.
So what I am suggesting has something changed in the economics of the world. Those early flats had a similar to todays coverage and side yard boundaries. Or has the development levies got out of hand and the tax gone through the roof. Is it now uneconomic to build new for rentals.

[Davo36]

No development contributions then. Didn't have to pay thousands for each water meter.

Didn't need complex fire design, ventilation design, noise reports, geotech reports and yada yada yada.

But also incomes would have been increasing alongside property values, and they're just not now.

[Wayne]

Has always amazed me the disparity in NZ and say the USA. I know it's a much bigger market but glass is glass, concrete is concrete. WE can build "cheap" for $645 USD a square metre. Really high spec around a thousand. Why is NZ so expensive?

And Aus - I'd love to know why also.

[Bobsyouruncle]

Yes I forgot about Oz also being cheap. Can't be just our isolation as OZ imports nearly everything as we do.

[Davo36]

I'm sure it's to do with building suppliers here keeping the situation as it is.

Any time someone tries to import product cheaply they do a number of things like: a) Complain that the other company is 'dumping' product and get it stopped, b) Lower their own prices for a while to put the competition out of business, then raise prices again.

None of which is illegal. All sorts of businesses (e.g. Air NZ) do this.

[Glenn]

I'm sure it's to do with building suppliers here keeping the situation as it is.

Any time someone tries to import product cheaply they do a number of things like: a) Complain that the other company is 'dumping' product and get it stopped, b) Lower their own prices for a while to put the competition out of business, then raise prices again.

None of which is illegal. All sorts of businesses (e.g. Air NZ) do this.

I did notice that last night. Spent all day at the NZPIF meeting in Wellington. Come time to go home to Nelson and found Air NZ had cancelled direct flight and rebooked up via Auckland. I arrived home four hours later. Most of the competition has mysteriously been pushed out of business. I should be grateful for at least getting home but a bit miffed that they never even said why the sudden change. Even more annoying to find another plane on the tarmac in Nelson when we eventually arrived and noticed a spare plane on the Wellington tarmac when leaving.

[Perry]

Three months' later.
About to burst?
Sooner rather than later.
How soon is soon and how later is later?

New Zealand's housing bubble is about to burst, former British politician and former Waikato University vice chancellor Bryan Gould says. "This is not a normal market. We need to stabilise house prices or else it will burst. That's going to happen sooner rather than later."

[Perry]

It's the Banks' Fault

Housing Bubble About To Pop, Bryan Gould Predicts
24 June 2016

[Glenn]

Reporting in from Nelson. The advertisements on trade me have now hit 50 to let. That is out of 5000 rentals there are only 50. This can only be regarded as a housing shortage crisis. Guess what is going to happen! Riots perhaps?

[Perry]

What is the difference between a real or potential

* owner-occupied housing crisis?
* a residential rental crisis?

(Good to see you, Glenn!)

[Perry]

Rental crisis deepens as Wellington flat viewing attracts more than 40 people
2 March 2017

Wellington is currently 3590 dwellings short of what it needs. The figures obtained from the Wellington City Council show that, in nine of the past 13 financial years, the number of dwellings built in the capital fell short of the estimated number required. The result is multiple tenants packing into rooms and a rise in homelessness, the head of the city's housing taskforce says.