NZ Housing market: Crisis or Not?

Photo: kirksblog.com

New Zealand’s housing market has been a hotly debated topic for the past four years. We are now in 2017, and we are told it is at crisis level. Or is it? With the elections coming up, further debate and promises will no doubt be made.

But, is it a matter of more housing? The cost of owning a home only increases, while incomes stay static.

Who is responsible for driving the price of housing up? The overseas investors – who flip homes at an incredible pace? Is it the developers meeting the demand for supply? Or is it a creation of policies coming out of Wellington?

What is the long-term picture for Auckland? Are they in preparation to become a stopover, a haven for those with wealth?

Glen Innes was a place where ordinary Kiwi families resided and grew, guided by the community spirit. After many years in residence, many families were moved to make way for the developers. The same pattern is now occurring in South Auckland.

There will be costs associated with the development of these zones, but who will meet those costs? The probability of lower income wage earners fitting the criteria to buy will be pushed further from their grasps.

What’s fundamental in noting is that these are the types of areas described on a developer group’s website as being “stigmatised by low socio-economic performance, unemployment and extensive social and community problems,” otherwise known as a generic excuse to justify the taking and the development of housing in those areas.

According to the Annual Demographic Survey, which compares prices to income in 404 cities, it has ranked Auckland’s housing market the fourth least affordable in the world, the same as last year, with prices at ten times the median income.

It’s a grave concern, when the average price to income ratio has soared so dramatically, that figures are double what a severely unaffordable market should be, 5.1 or over.

Right now, the median household income in Auckland is $83,000.00 while the median house price is $830,800.00, according to the Annual Demographia Survey, 2016.

While living wage campaigners encourage a minimum pay of $20.20 an hour from July 2017. They argue that “more than $4 above the adult minimum wage, is the level that is needed to give families with the necessities” the basics in life shelter being one of those. And as the cost of living increases, incomes stay static and any changes to incomes are made to the minimum wage and not the living wage.

For the wage earner, little or no chance exists to be able to buy into the home ownership programme. Policies need to address the current state of New Zealand’s living wage.

New Zealand was traditionally a nation of helping those in need. A fair day’s pay for an honest day worked. A strong community of a healthy nation. With the movement toward the capitalist model of business first and strategies of supply and demand, the question remains who is responsible for driving the price of housing up?

As one theorist said, the state of New Zealand’s housing is a “problem that was decades in the making, through various pieces of legislation.” Therefore we must look back, to understand the present.

New Zealand during the 1960s was a conservative family-oriented nation. By the 1970s, Think Big schemes were pursued. The 1980’s saw Rogernomics and the Right Shift model, and the 1990s saw the mother of all budgets.

The above are time frames and parts of policies responsive to the making of today’s misconception that there is a housing crisis.

I don’t believe there is a housing shortage. The policies coming out of Wellington suit neither the low-income nor the middle wage income, but a situation that favours the business sector.

I want to know your thoughts on the current state of New Zealand’s housing market. Share your thoughts below.

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