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@nzzp said in Housing hornets' nest:
... and this comes back to planning rules and district plans. The plans are geared to build standalone houses on individual sections. As soon as you start doing this, with front yards, back yards and recession planes, building the biggest 4 bed 2 bath place you can becomes the only sensible economic choice. So that's what people do.
Nailed it again.
The place that I just sold to the estate agent was only a 2 bed 1 bath and around 90sqm. Really cute cottage that had been relocated. One we had completely renovated. That wouldn't be possible now (well not easy) because the land would have to be subdivided. That all gets a bit complicated but council have changed the rules since it was put there.
The relevance to your post is that it was a cross lease which is difficult to do anymore due to the rules and subdividing. So people do just build bigger houses which may not be necessary and become too costly for first home buyers.
My niece (25 year old) has just bought an apartment to get her foot in the door, literally and figuratively, (without help from the Whanau) so it is doable with low interest rates although both her and her partner are earning and they have delayed having kids to do it.
Life choices. I was the same with spending so much time overseas.
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@snowy and really, we should be building 3-5 level walkup apartments; 120-160 sq m, 3bed + study. They just don't stack up commercially, so not built. And then there are gaps in the housing stock.
In Auckland, too, the leaky buildings screwed the market. Our second house should have been a 2000 era house, 10-15 years old, and in decent condition. But nothing existed sensibly between 95 and 05 ... so you were left with new (expensive) housing, or much much older, uninsulated stock.
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@nzzp said in Housing hornets' nest:
@snowy and really, we should be building 3-5 level walkup apartments; 120-160 sq m, 3bed + study. They just don't stack up commercially, so not built. And then there are gaps in the housing stock.
In Auckland, too, the leaky buildings screwed the market. Our second house should have been a 2000 era house, 10-15 years old, and in decent condition. But nothing existed sensibly between 95 and 05 ... so you were left with new (expensive) housing, or much much older, uninsulated stock.
Yes, we should be building low rise places big enough for families. I did a course in ecological design and one of the papers was on urban planning and how that could be done with communal gardens, playgrounds for kids, etc. It has been done successfully elsewhere but we don't seem to get it yet.
I still can't believe the leaky building thing. We have designed houses in a certain way for many many years for a reason. Who actually thought that internal gutting was a good idea? Let's keep the water inside the structure, wtf. Eves may take up some space, but there is a valid reason for having them, along with recessed windows. Some modern architects really lost the plot and some of the comments I made there can be done successfully, but it isn't good practice in my opinion.
The "older uninsulated stock" was good value years ago, I did a reno on a couple to get them up and they became a more attractive proposition to buyers. You really do need a team of trusted tradies to manage it though and you are gambling with large amounts of money because you don't really know the end result in value.
Some people don't like it either because apparently "gentrification" is a bad thing. I don't see it that way because healthy homes are a right, what I don't like are the regulations. I am replacing a heat pump in property today because it is a fraction under the new regs for the house it is heating. It's bollocks. It was the size of pump that was recommended to heat the place. It will now be in landfill. The place even has an HRV and circulates warm air. It is fully insulated. The tenants are warm and happy. The government can fuck off on that on that one. I won't start on the rangehood FFS. Anyway I like that property, the tenants are great so I'm keeping it and I apologise if I make a capital gain, but the yield is pretty shit so I'll take it (if I ever sell it, and an unrealised gain, isn't one).
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@snowy said in Housing hornets' nest:
The "older uninsulated stock" was good value years ago, I did a reno on a couple to get them up and they became a more attractive proposition to buyers. You really do need a team of trusted tradies to manage it though and you are gambling with large amounts of money because you don't really know the end result in value.
Reno with small kids ... ugh. And yeah- you need a good team of tradies. Motivate yours by sudden disappearance of those who don't do well by any chance?
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@nzzp said in Housing hornets' nest:
@snowy said in Housing hornets' nest:
The "older uninsulated stock" was good value years ago, I did a reno on a couple to get them up and they became a more attractive proposition to buyers. You really do need a team of trusted tradies to manage it though and you are gambling with large amounts of money because you don't really know the end result in value.
Reno with small kids ... ugh. And yeah- you need a good team of tradies. Motivate yours by sudden disappearance of those who don't do well by any chance?
Well, that threat was always there.
Yes, that is why other people do the renos, like me. Some people just want to buy a nice house as is. Good for both parties.
Other people don't like it, gentrification, capital gains, etc. I don't invest in oil companies for example. Each to their own.
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Akl Council Chief Economist take on govts latest tinkering
Precis: Rents probably won’t rise sharply, the bright line
tax extension will make little difference, but
interest deductibility will slow house price
growth. -
I've got a builder mate who moved to Bleheim about 4 years ago. He immediately noticed that the local market was out of whack (surprise, surprise) but especially for older folks looking to downsize without going to a retirement village. They are typically living in the statehouse/traditional 3-3.5 bedrooms and 90-110m or so.
He partnered up with another guy and they've been building about 3 smaller houses on larger sections, with a focus on easy access and maintenance. Obviously a different scenario when you factor in city density and RMA.
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@paekakboyz good call, interesting.
Met a bloke on the Kapiti Coast who had done really well. He was building lots of 1 bed and studio units to rent out - filling a niche for (mostly) single people that struggled to find housing. Was getting massive yields off sites, and offering good quality housing at the same time.
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@paekakboyz said in Housing hornets' nest:
I've got a builder mate who moved to Bleheim about 4 years ago. He immediately noticed that the local market was out of whack (surprise, surprise) but especially for older folks looking to downsize without going to a retirement village. They are typically living in the statehouse/traditional 3-3.5 bedrooms and 90-110m or so.
He partnered up with another guy and they've been building about 3 smaller houses on larger sections, with a focus on easy access and maintenance. Obviously a different scenario when you factor in city density and RMA.
I'm going to look at that. It is very easy to get sucked into "3 bed" syndrome even in the country. We do need more small cottage type places.
Dividing the land within the rules... well just fuck.
It really is difficult. I could put a second 2 bed on my property for my father who is struggling a bit since my mum died. The max 60sqm is really restrictive even though I have 11ha.
I could rent it out when he goes, another property built and available but I'm not allowed.
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@nzzp said in Housing hornets' nest:
@jc rent controls are the best way to destroy a neighborhood short of bombing.
Some economists think they are even more effective
New York is an excellent example of the damage well meaning policy does in that space.
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@antipodean said in Housing hornets' nest:
@nzzp said in Housing hornets' nest:
@jc rent controls are the best way to destroy a neighborhood short of bombing.
Some economists think they are even more effective
New York is an excellent example of the damage well meaning policy does in that space.
Found the quote - Assar Lindbeck.
In many cases rent control appears to be the most efficient technique presently known to destroy a city — except for bombing -
@nzzp said in Housing hornets' nest:
@victor-meldrew there is definitely a supply problem.
From 2015, but the best analysis I've read on this linked to below. Sheets home the responsiiblity to government constraining supply through RMA, and stimulating demand through immigration (and urbanisation).
since the article was written house prices have gone nuts everywhere, but it's still got some great arguments
Thanks - really informative article. Couple of thoughts came to mind after I read it.
Tax doesn't make much difference to house prices, it's all about supply and demand. (As an aside, the UK has some of the highest land taxation and a fall in house prices significantly impacts government revenue so there's no incentive to reduce/curb the rise in house prices)
Local councils and planning bureaucracy have a huge impact on housing prices (and not just in NZ). People won't vote for people or policies which reduce or cause the value of their house to stagnate.
Similar problems exist all over the world. An intractable problem or just too difficult politically?
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@snowy said in Housing hornets' nest:
@reprobate You did call all property investors c*nts and scum. I happen to be a property investor. Happy to move on though.
Anyway the government are also c*nts and scum apparently (as if we didn't know):
I suppose they have to do this to stop the situation that I have been describing with private investors pushed out and no rental stock. Not fixing the problem just shifting it sideways.
I actually didn't say that about all investors, you misinterpreted, and I've already tried to clarify that I was referring specifically to investors having a cry about rule changes and how they were going to raise rents in response, while enjoying massive capital gains and the lowest interest rates ever, and already having been raising rents in that situation.
Your link is about the government buying houses since 2017 - that's not because of the situation of a 'coming soon' rule change that you think is pushing investors out. It's pretty clearly trying to solve one problem by worsening another, and beyond doubt a shit idea - but nothing to do with recent policy.
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@victor-meldrew said in Housing hornets' nest:
@nzzp said in Housing hornets' nest:
@victor-meldrew there is definitely a supply problem.
From 2015, but the best analysis I've read on this linked to below. Sheets home the responsiiblity to government constraining supply through RMA, and stimulating demand through immigration (and urbanisation).
since the article was written house prices have gone nuts everywhere, but it's still got some great arguments
Thanks - really informative article. Couple of thoughts came to mind after I read it.
Tax doesn't make much difference to house prices, it's all about supply and demand. (As an aside, the UK has some of the highest land taxation and a fall in house prices significantly impacts government revenue so there's no incentive to reduce/curb the rise in house prices)
Local councils and planning bureaucracy have a huge impact on housing prices (and not just in NZ). People won't vote for people or policies which reduce or cause the value of their house to stagnate.
Similar problems exist all over the world. An intractable problem or just too difficult politically?
I think tax does affect pricing in NZ. NZ has a highly favourable tax situation for rentals, the capital gain is untaxed - which is why every old couple wants to put all their retirement savings into buying a rental. Plus it's consider safe, because old people are stupid and think that putting all your eggs in a basket is safe. You can have a housing shortage, but if all the people clamouring for the one property have bugger all money, then the price is limited. If your demand includes old rich people, and it includes people who can access interest free loans, and people who can write the interest off as an expense, and if the RB artificially lowers interest rates, and if the banks turn 20 year mortgages into 30 and lend irresponsibly, and if the government and rich kids' parents are trying to subsidise the poor to be able to compete, then that all cranks up the price despite the demand (in terms of population) being constant - which it pretty much is right now, due to Covid.
All the other stuff needs fixing too, I don't mean to minimise that.
There's a potential contradiction in blaming migration (China) while saying NZers want a 1/4 acre section so there is no demand for higher density... And who votes in local council elections? I assume turnout is pathetic, so wouldn't have thought that unpopular policy would really matter - due to having no idea what any of the candidates actually stand for. I do think we have an issue with those in power, be it local or central, having a conflict of interest due to so many of them owning property. -
@reprobate said in Housing hornets' nest:
I think tax does affect pricing in NZ. NZ has a highly favourable tax situation for rentals, the capital gain is untaxed - which is why every old couple wants to put all their retirement savings into buying a rental.
Do you think a Capital Gains Tax in NZ will stop people investing in property for their retirement? (It hasn't in other countries). What is the return (after tax) on rental v stocks/bonds and what rate would a CGT stop people investing in rental?
You can have a housing shortage, but if all the people clamouring for the one property have bugger all money, then the price is limited.
Isn't that the same thing as people not being able to afford the price of the house?
that all cranks up the price despite the demand (in terms of population) being constant - which it pretty much is right now, due to Covid.
Is the demand constant now, or has it been constant for a while or has there been a big growth in demand?
. And who votes in local council elections? I assume turnout is pathetic, so wouldn't have thought that unpopular policy would really matter - due to having no idea what any of the candidates actually stand for.
Are there objections/campaigns when a council approves higher-density housing or new developments which might impact (nearby) house prices?
Genuine questions. Appreciate your thoughts.
Housing hornets' nest