Council red tape is costing home builders dearly with one person spending $270,000 before getting council sign-off to start building in their backyard.
Further declines in home affordability have been highlighted in a report by Massey University.
The report covers last September, October and November and shows affordability dropped by 2.8 per cent nationally, with some larger declines in Taranaki, Northland, Southland, Nelson/Marlborough and Manawatu/Whanganui.
The Massey University Home Affordability Report says Auckland and Central Otago Lakes remain the country’s least affordable regions and that Auckland’s median house price reached a new high in November of $851,944 – a year-on-year increase of $86,944.
Author of the report, associate professor Graham Squires from Massey’s School of Economics and Finance, says there are nine regions that show greater annual increases than Auckland.
Home prices in Central Otago Lakes increased by 31.9 per cent over the past 12 months, while Nelson/Marlborough increased by 24.3 per cent. House prices in Taranaki increased by nearly 20 per cent.
The ratio of median house prices to median wages in New Zealand remain “very high”, Dr Squires says, and this puts a strain on first-home buyers.
One region showing a strong improvement in home affordability is Canterbury.
Squires says: “Steady reductions in the OCR over 2016 equate to an 11 per cent reduction in mortgage interest costs, easing the burden for home owners.
But more stringent deposit requirements and tougher rules for bank lending could start to reverse this trend, especially for first-home buyers.”
New build
If anyone wonders why it’s so hard to build a home in Auckland, I can give you the answer. It’s $270,000.
A friend is subdividing to build a modest single-storey home in their backyard.
Construction hasn’t started yet, but in the two years since his plan was hatched he has spent $270,000 – mostly on council fees. The rest for a concrete drive and a hook-up to the drains.
Is it any wonder we have a housing shortage in Auckland?
Body corp reforms
Apartment owners across New Zealand could soon be protected from rogue body corporates if the country’s first peak strata property body gets its way.
The Strata Community Association is using a government review of the Unit Titles Act to push for greater regulation of strata managers, which it says would protect apartment owners.
Strata Community Association (NZ) president Joanne Barreto says: “When you have no professional benchmark for individuals and companies in such a huge sector like strata property, things can go rogue pretty dramatically, and that’s exactly what we’re aiming to change.”
• Steve Hart. Editor, Herald Homes.
