KiwiBuild - Labour's latest spectacularly stupid idea.

[drelly]

Yes, the topic of another thread.
The rest of the world, overpopulated, polluted, corrupt, harsh weather ...or whatever....sees us and realises just how comparatively cheap it is to buy great property here.
That effect flows downstream.
Plus there are no restrictions or impediments to purchase, means young NZ families are rapidly losing the ability to compete.

I've never seen any figures on how many properties are bought and held long term by non-nz resident investors, so it's hard to comment. For immigrants coming here, they're not buying first home buyers houses. They want new ones or at least better quality ones. Also, it's cheap to buy here with overseas money but they still have to live on a NZ wage.

[speights boy]

What did you make of the Hobsonville quota decision?

[drelly]

What did you make of the Hobsonville quota decision?

I hadn't heard about it (see here). I think like anything, it depends on how it's done. However, it does remind me of the Adjustable Rate Mortgages that they had in the US, where the rate went up after the first few years - the way they delay paying for the land. There are so many factors. A cheap house is not necessarily a house that someone wants to buy. If the cheap houses drag down prices of surrounding houses, that would create issues. The delay in buying the land is effectively a subsidy, which doesn't solve the problem, just avoids it for a while at others' expense. It sounds like it failed 3 years ago, so I don't know why they're doing it again.

[speights boy]

so I don't know why they're doing it again.

Preempting on a Friday Labour's Monday announcement.
Obviously not much fanfare as it's very very minor.
However methinks you'll be disappointed if you expect to see radically different plans from National.

As an aside.
Across the road Summerset bought the old Monterey Park Motor Museum for a new retirement village.
Nice spot.

They and Ryman espc, probably are two of the smartest property developers in the business.
Very profitable business model.

Disclosure: Hold RYM & SUM

[eri]

manukau city has it's apartment buildings looking down on the shopping center

next will be new lynn?

1 bed from $249,000 (one ad says 2 beds - $249,000, the other 1 bed - $249,000, what's the bet you can't get 2 beds for $249,000)

http://www.trademe.co.nz/property/residential-property-for-sale/auction-535680305.htm

"smart growth" presumably means more will spring up at places like sylvia park where transport, shopping, reasonable land prices and reasonable demand exist

that would start providing the places for retirees to move to as they aged and young dink families to get their foot on the property ladder with only a short commute to work

[essence]

Also, it's cheap to buy here with overseas money but they still have to live on a NZ wage.

It is NOT cheap to buy in NZ with overseas money, even with the conversion from foreign currency to $NZ. Each and every market is different, we all know that. We can get into a discussion about what $xxxx will buy compared to £'s, or ringitts, or Euros but IMHO, the NZ market is probably 20-30% over-valued.

With the newer building rules in NZ, new builds are double-glazed and insulated up the yin-yan but older properties are horrendously cold.

It is mandatory in the UK for all properties to be double glazed & insulated, so those moving from the UK to NZ find the houses really hard to live in because they are so cold. We (generally) don't have central heating.

Why wouldn't overseas nationals "park" their money in NZ due to the GFC. NZ is a safe country (just been voted best country in the WORLD to do business in!), companies are easy to set-up (ridiculously so), deposit rates are still higher than most Western countries.

[artemis]

So, we are now starting to see a wee bit more of this programme and how it will work. Much more detail to come though. (Does that mean it is being tweaked on the fly?)

So, still 100,000 affordable homes over 10 years but in the first few years many less. Mr Twyford says year 3 they will get up to 10,000. Affordable has strict limits - different for Auckland and elsewhere.

Properties have to be high quality.

$2 billion set aside for the programme which will be recycled as properties are purchased and funds come back into the pool.

The only criteria will be first home buyers with citizenship or residency. Assets or income not relevant, though no doubt the banks will be extremely interested

Approaches are already being made to developers with a view to purchase off the plans or purchase a build in progress. As well as lining developers up for future builds.

Immigrant construction workers will be permitted, but for each one the firm will need to take on a local trainee or apprentice.

Anything else (at present)?

Just to add, the intention is apparently to include a mix of affordable, social and market priced properties. That will be an issue in apartment blocks.

[jimO]

infrastructure will be a major cost, roading, drainage amenities etc

[Don't believe the Hype]

So labour want to replace the investor/foreign buyer demand with their own demand on existing planned builds.

When they say they want to build 10k houses what they meant was they want to buy already planned houses... they need to spend some time identifying the difference between supply and demand.

When they say they want to reduce immigration they mean they want to import Tradies to build these houses with a condition of employers bringing on apprentice - good luck with that in this full employment environment. So this policy adds demand for houses to house these foreign workers and costs by employing apprentices

sounds like a recipe for low cost houses that remove pressure on current housing stock.

not to mention the poor building practices these new apprentices will learn from low quality foreign sourced builders

[flyernzl]

In his latest weekly (2 November 2017) report Tony Alexander points out the principal of 'crowding out':

"Is it reasonable to think that by the end of this parliamentary term 10,000 affordable homes will be getting built each year? It will be difficult but there is a chance that this level will be achieved, and it will be gained by the ages old process of what we economists call “crowding out”.
When the government sector expands there is a tendency to crowd out the private sector. In this case what we mean is that the construction of 10,000 affordable houses is highly likely to be achieved by houses which would otherwise have been built without the programme not being built."

http://tonyalexander.co.nz/topics/regular-publications/bnz-weekly-overview/

[eri]

He was calm – no sign of stress or frustration.
But that will come later on when the aspirational words almost certainly fail to deliver in timely fashion the glorious vision he and others in the new government earnestly think they can achieve if we all try really really hard and work together in a collaborative manner.
(Housing affordability, end of homelessness, strong per capita GDP growth.)Lofty goals and values in Opposition are one thing.
Grappling with the reality of people who are not prepared to sacrifice themselves and their freedom for
long in the future social goals set byother people
is something entirely different andsomething which aspirational people often fail tounderstand

[kiwidag]

Assuming they are still in power ten years later, Labour will never achieve 100,000 houses... and they know it... its their marketing blab for glorious headlines

[artemis]

Assuming they are still in power ten years later, Labour will never achieve 100,000 houses... and they know it... its their marketing blab for glorious headlines

Depends how they choose to define it. For example, will the developments under way or consented be counted? Including social and private housing builds which include 'affordables'.

There is a lot we don't know about the programme, including how the $2billion is to be spent and re-spent. Which is key to the success or otherwise.

[artemis]

Mr Twyford agrees his job is on the line over Kiwibuild. He didn't sound too sure though, maybe hoping for the best.

He did think that household income over $60k would be enough to buy for first home buyers even though officials told him last November more like $114k pa.

http://www.newshub.co.nz/home/politics/2018/02/doubts-over-kiwibuild-s-affordability.html

[PC]

Oh dear.
If only there was a bunch of nice hard working people keen to invest their hard earned loot to provide rental properties at no cost to the taxpayers.
Oh wait - never mind.