In January 2019 it emerged that New Zealand houses were some of the least affordable in property price:income ratios. Auckland was the worst, sitting at 9:1, whilst Christchurch was 5.4:1. In other words all of ones after-tax income for nine straight years would be necessary to buy a property on a given day, never mind the fact that in those nine years, the value has most probably increased; that you have day to day living expenses.
In 2002, in Twizel in the Mackenzie Basin of the South Island, a house and the land it sits on would set you back N.Z$90,000. Now the average price in the Mackenzie District is about $543,000, pushed along by the development of new subdivisions around Twizel and the terrace overlooking Lake Ruataniwha.
For me to buy a house now, I would have had to not spent a single cent of my after-tax income since the start of 2013, and even then it would not buy me very much. Maybe 1/3 of that house in Twizel, which would still be another 12 years away from owning – in other words not able to call mine until 2032.
I propose a range of measures that I believe would help to reduce the pressure on the New Zealand housing market.
- Reduce migration to 25,000 per annum – in 2018 more than 97,000 people moved to New Zealand, a rate that that cannot be adequately planned for by councils, social service providers or central government
- Give local councils the power to acquire properties that are abandoned and whose landlord is not living in New Zealand, and have them sold at their most recent valuation – in Christchurch for example this would enable the acquisition of the Addington sale yards
- Introduce a cap on the number of properties an individual can own, so that the market cannot be dominated by a few wealthy individuals or consortium’s
- End land banking
- Support tiny housing for those who want small houses with minimal floor area – not everyone wants to live in an average house and some tiny homes are quite stylish
However, I do not support the deregulatory approach that would be most likely adopted by the National Party. Every time this comes up, the methods are always the same:
- Get rid of or substantially downgrade the Resource Management Act – no argument that the Act is in need of reform, but that is not surprising when the Act doubles in length
- Remove the urban boundary limits, especially around Auckland that open up land to endless urban sprawl – are New Zealanders really that averse to living in apartments or in downsized properties
- Loosen controls on speculation and quick sales
Housing in New Zealand is sort of our social achilles heal. But it does not need to be that way and the faster New Zealand addresses housing, the healthier our society will become.