Struggling to?take the heat?out of housing?in Auckland
After another week with the Auckland property boom centre-stage, it is first-home buyers who seem to be the biggest losers.
It started with a report from Land Information NZ that only 4 percent of Auckland house sales went to non-resident buyers, which would have been welcomed by the Government.
Opposition parties were quick to challenge the data, saying it did not include foreign beneficiaries of trusts and non-residents on student and work visas.
On Wednesday Reserve Bank Governor Graeme Wheeler said resurgent house prices were a risk to the economy, pointing out that the average house price in Auckland was nine times the average income — making it one of the least affordable markets in the developed world.
The bank raised the possibility of an income cap for loans similar to the British one of 4.5 times annual earnings, and Prime Minister John Key said the Government was open to the idea.
Housing Minister Nick Smith weighed in with a threat to use the Resource Management Act as a game-changer as he continues to try to convince local authorities, principally Auckland, to free up more land for housing.
Smith is on the money there. It is estimated that Auckland is between 20,000 and 70,000 houses short and needs 13,000 new houses a year. Only 9700 consents were issued last year.
Auckland Council’s unitary plan, due to come back before it in July, becomes extremely significant if the council can convince Aucklanders to accept more infill housing and apartment buildings.
The collateral damage of an income limit policy would be first-home buyers who would probably need to earn north of $150,000 a year to buy a median-priced Auckland house ($812,000).
It is no surprise then that there are reports of young couples having to think about leaving Auckland to get an affordable home, with pressure on house prices migrating to Hamilton, Tauranga and even further.
Let’s hope plenty of them come to learn that there are affordable homes and a desirable lifestyle here in Gisborne.