Residential building completions in Auckland off to a cracking start this year

Property

The number of new homes being completed in Auckland has doubled over the last five years and is continuing to rise

19th Mar 21, 10:21am by Greg Ninness

The number of new homes being completed in Auckland got off to a cracking start this year, with 822 new dwellings receiving Code Compliance Certificates (CCCs) from Auckland Council in January, which was up 28% on January last year, and up 55% on January 2019.

That returns the number of new homes being completed in the Auckland region to its upward trajectory, after it dropped unexpectedly in December.

Over the 12 months to the end of January, 12,220 new homes received CCCs from Auckland Council, indicating they have have been completed to a stage where they are ready for occupation.

As the graph below shows, the rolling 12 month average of dwelling completions has been steadily increasing since Auckland Council began collating the data in 2013 and has been above 12,000 a year since November last year.

That means on average more than 1000 new homes are being completed in Auckland each month.

However the number of new homes being added to the region's housing stock would be slightly lower than that because some existing homes would have been demolished to make way for new developments.

The average number of new homes being completed in Auckland each month has doubled over the last five years and more than trebled in the last seven years.

The comment stream on this story is now closed.

Graph based on the number of Code Compliance Certificates issued for new dwellings by Auckland Council.

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104 Comments

by mikekirk29 | 19th Mar 21, 10:37am 1616103472

2013-18 pop of Auckland increased 15%
Housing stock increases was 5%
By the way, today RE NZ showed that yesterday new listings in Auckland were 193 for the day
On November 19th (peak in this cycle) it was 261.
Market peak for sales and listings was , therefore, between 19th November and December 1st.

by Beanie | 19th Mar 21, 10:52am 1616104344

It was recently reported that Tauranga had declining median house prices, which was seized upon by some as evidence the market there had turned. But it isn't so.
The first batch of sections in a new subdivision went auction just over a month ago and all fetched around the 450k mark. Winning bidders were always older people, with a younger couple just missing out each time. Heartbreaking to watch them.
Now the next batch of (worse) sections have just been auctioned and fetched over 510k.
I don't know how all this is going to play out, but we are witnessing history. 50 years ago young people would be marching in the streets.

by Passerby | 19th Mar 21, 6:40pm 1616132422

It’s all very sad really. I am a relatively young person, early 30’s. My husband and I own co own our home with the bank that will take me multiple decades to pay off. I can still feel the stress and the anxiety of going into open homes and auctions after auctions only to lose it to a person buying their 11th home or 7th home. This is a handful of years ago. Even then my mental health deteriorated significantly with all that hustle. I waited 2 years and saw no ease in prices even though everyone then said the bubble will pop.

Now, I work with people slightly younger than me stressing out to get into their first home and my heart aches for them. They are so desperate, stretching to extreme extent. I floated the idea of organising a March/protest and not a single person is keen at my office even though they are going through this extreme stress. I can see it in their disappearing smiles, every call they have with the bank and calling their lawyers only to keep missing out over and over again. It amazes me. I have no words. Everyone is happy to accept status quo and not even part take in a March to show the government their unfair plight... nothing will change if we don’t take action first. The greed we are surrounded by is deafening, yet no one wants to do anything.

by blobbles | 19th Mar 21, 12:36pm 1616110587

Young people marched for climate in one of the biggest protests in NZ history. At the same time we have a leader claiming it's the "nuclear free moment of our generation". What action have we got from the government? Nothing.

This has taught young people that protests don't matter, the pollies will say nice things, then do something else. Unless some of them want to organise violent revolt (they have taught to be much more pacifist through schooling), there won't be any action.

So why would they bother about protesting another thing that the government won't care about or do anything about?

This sentiment was straight out of a discussion I had with a bunch of young people from my workplace after I bought up the possibility of protest about their collective bad housing situations. Many of them are seriously considering Aus.

by Brock Landers | 19th Mar 21, 11:06pm 1616148384

Exactly... protesting doesn't change anything.

Protesting with a few well aimed molotov cocktails on the other hand...

by RickStrauss | 22nd Mar 21, 5:01pm 1616385667

This present intergenerational wealth theft via policy does worry me deeply. Reading accounts from an Austrian Jew of the evil of inflation visited upon people in the 1920s, he saw this flowing through to a precipitous decline in morals as people found themselves thinking "if you destroy my wealth, why shouldn't I take yours?"

It's stupid and damaging to be pushing NZ toward being a developing country with a poor servant class, just to perpetuate the luxurious greed of older investors. I'm surprised we have not seen worse than we have, yet...or at least vandalism such as vandalised or disappearing real estate signs. The young are proving remarkably tolerant of the intergenerational wealth theft being visited upon them.

by EarlyRiser | 19th Mar 21, 1:39pm 1616114380

I went to the auctions in Hastings earlier this week for nothing more than a nosey. Amongst the properties that sold was a 3-bedroom home in Taradale (good suburb in Napier) which sold for 770K. I figure it was a fairly standard 80s house and it looked to be tidy but with a lot of original features i.e. a bit dated looking. The "winning" bidder looked to be a youngish Kiwi with who I guess were her parents, supporting her. Another bidder was in the race, driving the price up by lots of $1,000 at a time. You could literally see the pain in this lady's face and it looked like she had stopped bidding at one point, only to receive what I assume was parental encouragement (and who knows, perhaps their financial support too?). She continued bidding and "won". Now I could have been reading it all wrong and completely misunderstand, but the impression I got was that she was pushed to the very limit financially to get in to what, I assume, was her first home. I damn near had tears in my eyes seeing her pain (and these were not tears of happiness) and it makes me feel rather sick at where things are today.

by CourtJester | 19th Mar 21, 2:48pm 1616118505

Facebook ad next week: "Great price achieved, 250k above CV, VERY HAPPY VENDORS :))))))" with the picture of a grinning real estate agent

by fortunr | 19th Mar 21, 3:19pm 1616120388

If house prices keep at these levels, many young Kiwis (especially the skilled ones) will end up leaving this country, once this Covid disruption ends. They will leave in massive numbers and parasitic specuvestors will be left trading with each other depreciating assets ever more difficult to fill with renters, also having the prospect to finance their speculative "investments" in a rising interest rates environment.

by Zack Brando | 19th Mar 21, 4:31pm 1616124692

The best people will leave; productive people, entrepreneurs.. those with capital to invest. Australia is smart and doesn't allow non-citizens to access social-services/benefits. Non-citizens causing social issues are fast shipped back form whence-they-came.

by sadr001 | 19th Mar 21, 2:09pm 1616116150

Jacinda Arden has openly stated that she wants investors who have 10+ properties. It is the Ma and Pa investors with 1 or 2 rentals that she wants to eliminate from the market.

by Property Leader | 19th Mar 21, 6:01pm 1616130073

Well I am an investor with over 10 rentals and sorry I do not feel warmth or kindness from our government. I provide good warm dry compliant homes for normal people. All I feel is bad vibes and lack of understanding of our industry. The vast bulk of all sales go to owner occupiers like about 75%. Just look at the statistics from Core Logic.

by Brock Landers | 19th Mar 21, 11:08pm 1616148488

Doing god's work there mate. You're a saint.

by dago | 19th Mar 21, 12:12pm 1616109170

Jacinda Grant and Orr would get off on that scene

by thewanderer | 19th Mar 21, 1:17pm 1616113021

I watched that yesterday too. The failure of making land available for housing in Tauranga is spectacular. When I postage stamp patch of land is selling for $510K, it's a massive planning and zoning failure all round. That's realistically what a lower quartile HOUSE should be, for the average household income.

by Carlos67 | 20th Mar 21, 2:10pm 1616202600

What suburb in Tauranga are sections selling for $510K ? that's reasonably expensive and bear in mind any new subdivision is generally getting further and further away from central Tauranga.

by Zachary Smith | 19th Mar 21, 10:50am 1616104239

A real estate agent told me that many younger people are not interested in buying places that need work. A new place for their first home is what they envisage.

This surprised me as I thought home maintenance was ingrained in our culture.

But it could be true. They should relax the rules a bit on KiwiBuild and make more of those new houses you see advertised on TradeMe for 599k.

Young people should also consider simply living with their parents especially if it is convenient. This way a lot of mundane things can be shared like Internet access, appliances etc.

It would make sense for them to stay at home and possibly buy an investment property when they can afford the payments, most being covered by rent returns. I know this wont be possible for everyone but it would be hugely advantageous to make this work if you are young and able to.

The culture in NZ is changing and people will have to change with it or life will be very hard.

by james108 | 19th Mar 21, 11:01am 1616104897

I’m young a don’t really want a place that needs loads of work. I don’t have the skills to do much more than paint a wall. I am in a well paid job so I figure my time is better spent working on my job that I have a lot of expertise in and get paid well for.

Don’t mind paying someone else to do it though, but then if you do this is there much value left in it compared to just buying a house in reasonable condition? Maybe improving a house yourself is only worthwhile if you don’t value your time ?

by Zachary Smith | 19th Mar 21, 12:06pm 1616108807

Young people today!?!
Actually, thanks for your feedback James. I guess we considered home improvement like a second job. Money saved was worth more than money earned. We did enjoy the work although paying people to do it is a good idea. A lot of Boomers have huge amounts of tools and gear that probably is not cost effective. Home improvement or at least the idea of it was a sort of life philosophy, the way of the Boomer.

by 2 Cent | 19th Mar 21, 12:57pm 1616111838

We have noticed that since our main competitors are investors (who anecdotally don't seem to care about the state of the house), the price between a reasonable house and one that requires a lot of work is negligible.

by CourtJester | 19th Mar 21, 2:15pm 1616116503

You know damn well it's not the house's quality that costs a million dollars. It's the land.

by sadr001 | 19th Mar 21, 2:17pm 1616116643

I’ve been struggling to get building quotes below $500k of late. Excluding land and council fees.

by sadr001 | 19th Mar 21, 2:15pm 1616116503

Consider that you have to pay tradies out of your tax paid income whilst if you did DIY there is no tax due. If you make $50 /hr and can get that for each hour of overtime you are only ahead if you pay your painter less than $33 an hour due to tax ($50 * 0.67 (marginal tax rate) * .99 (ACC Levy) ).

by Believer1980 | 19th Mar 21, 3:12pm 1616119928

They are likely to charge GST on their work too. so that is another 15%.

by james108 | 19th Mar 21, 3:38pm 1616121508

You are current in part only. You have not factored into this that the painter would work ALOT faster than you (like easily twice as fast) and do a better job. Bit arrogant to assume you would be as efficient as a pro. This could easily double or triple the value of the painter. Also you have discounted the future value of your wages resulting from working hard at your job, I suppose this is only applicable to some jobs with a long runway. The economics would be different for different people depending on their skills at diy and earning potential in their main hustle.

by Zachary Smith | 19th Mar 21, 8:54pm 1616140447

I rate myself a better painter if a bit slow. I painted the hard part of my house but my wife got sick of waiting for completion and hired painters. Six years later my paint still looks great and theirs is falling off. I'm fixing it up now. They don't prepare properly and are more interested in how it looks rather than how long it stays on. They had the gall to say my work was bad because of visible brush strokes.

by CR1980 | 21st Mar 21, 10:32am 1616275940

Bless James...you are too important to be doing things like DIY repairs or improvements to a house, yes much better to pay someone else...problem is everyone, especially young people are think they are 'above' manual labor or mundane work...it's actually near impossible to get people to come out and do work for you!

by blobbles | 19th Mar 21, 11:18am 1616105896

"Young people should also consider simply living with their parents...", that's exactly what's happening. But because housing is still going crazy, they will be there forever.

We are in a much more mobile world than we used to be. It is more likely that young people will simply vote with their feet as they know (from climate change protests), protesting doesn't do anything. Essentially the major parties have pandered to old people, who by and large, have voted for their own selfish interests above the future of the planet/country. I saw this a LOT when looking for houses, the number of old retired couples I would see in beautiful 200-400sqm 4-5 bed houses.

by Market Interest | 19th Mar 21, 11:41am 1616107286

Not playing devil's advocate here - but old retired people won't live forever. And they can't take anything with them when they go...so isn't this just a temporary problem?

by Dale Smith | 19th Mar 21, 11:50am 1616107801

There is the true story of when they changed from pounds to decimal currency. One elderly pensioner thought that it was a bit unfair to bring it in now because old people like her would struggle with it. She said, 'Couldn't the Govt. wait to all the old people died first before they brought that in?'

Sounds like a plan.

by Rob Reid | 19th Mar 21, 9:42pm 1616143322

Haha! I'm glad decimalisation arrived in 67. Just in time for me to stop worrying about how many shillings there were to a pound etc.
Conversely, my Dad still thinks metrics was a step backwards.

by ikimpaul | 19th Mar 21, 1:18pm 1616113138

That only really works for only children ie they inherit the house- a family of 2-3 children need to split the proceeds, plus with more people living into their 80's and 90's most of their children will be in their 40's, 50's and 60's before their parents die- bit late at that age to get a mortgage if you are using your parents house as a deposit for your own house.

by CWBW | 19th Mar 21, 1:18pm 1616113118

"... when looking for houses, the number of old retired couples I would see in beautiful 200-400sqm 4-5 bed houses."

What's wrong with that? Did they got it for free? Are you envious or are you just trying to start off where the pioneers left off?

That's exactly the problem with this generation- everyone wants to start from the top!

by blobbles | 19th Mar 21, 3:20pm 1616120459

It's a housing efficiency problem. Young families unable to afford to enter the market and are living in a garage because rents are too high. Meanwhile many old people are sitting in near mansions with multiple empty bedrooms, many which haven't had their doors opened for months.

Next you will tell me they "worked" for their capital gains? I suppose if you call voting in people to enrich themselves, I guess that's true.

by Cheetahlegs66 | 20th Mar 21, 10:28am 1616189296

Mate, lot of bitter people on this site. Anyone who owns a house is privileged, or had it easy compared to todays youngsters. Not too many saying they worked 7days a week, or took an extra job to get ahead. It may not be right, but the reality is for unskilled low wage folk you are going to put in some grunt to own a house. Personally I envy those who own multiple properties. I regret selling mine and wish I had fully utilized the legal tax advantages. Equities done ok tho....

by Nzdan | 20th Mar 21, 10:37am 1616189824

But you'll find the truth is often stretched or overstated. Like the 20+% interest rates that lasted for all of a 2 year period.

by karl seastrand | 19th Mar 21, 11:34am 1616106865

Zach...Agree about living at home but another option is for young people to buy and get a couple of flat mates. When I was young I always owned 4 bedroom houses and had 3 flat mates. Not only extra income but you quarter the bills and (given the right flat mates) you stay home more. Also when you need stuff done usually one of the flat mates will have a contract and you get the job done cheap. Much harder now but if you can get a deposit together it is still doable.

by GV 27 | 19th Mar 21, 12:47pm 1616111256

By the time you get a deposit together, you're often at the point where having kids is a more pressing priority than the flatting experience. And outcomes for children who live with adults they are not related to are far worse than they are for kids who don't live in such an environment. So you've got maybe a year or two years tops of flatting income before you're likely to add a child into the mix if you've managed to get a deposit together in your mid-late 20s - and that's a big if unless you have parental help. And if you're going to add flatmates, you need more rooms, and more rooms means a shitload more money in this market. Like most advice from people who think what they did will still work in today's market, it just doesn't wash.

by karl seastrand | 19th Mar 21, 1:58pm 1616115516

GV....it is hard to have a deposit by mid 20s but if you do you can hold off on the kids for at least 10 years. Personally I did not have kids till I was 40 and one of the biggest reasons for that was the financial one. Unfortunately, because of the monster that we have created in the area of housing, having kids young almost automatically disqualifies you from the chance of financial freedom.

And anyway, who in their right mind would want to put such a restrictive voluntary handbrake on their life through saddling themselves to one partner and screaming babies in their 20s? Big world out there to explore and it is a lot easier to do without the excess baggage.

by al123 | 19th Mar 21, 2:40pm 1616118001

Waiting until 40 is very risky if you're a woman.

by karl seastrand | 19th Mar 21, 6:54pm 1616133245

I guess 40 is starting to get risky but these days 36 or 37 is not unusual at all. I think over 30 is average now.

by 2 Cent | 19th Mar 21, 12:59pm 1616111998

You do realise with current deposit requirements that you are likely in to be your thirties before you can afford a deposit (without the help of mum and dad). Goes to show how things have changed since your day.

by karl seastrand | 19th Mar 21, 2:00pm 1616115602

2 Cent.agree that is by far the biggest (almost impossible?) challenge

by Fritz | 19th Mar 21, 3:45pm 1616121946

Yeah. I don't know if they changed it but at least until recently I think this website's FHB affordability report assumed buying at maybe 27? Way too young.

by al123 | 19th Mar 21, 3:49pm 1616122182

Yup. That's what gets me when people waffle on and on about the so-called 'luxuries' which are preventing millenials buying homes. Being able to live in a home without having to share with flatmates and being able to have kids both before 30 are pretty big 'luxuries' that most boomers had that most millenials couldn't afford even if they never ate a single avocado.

by Dale Smith | 19th Mar 21, 11:43am 1616107430

Everything you are suggesting is retrogressive and highlights a failed system. What happens when buying or renting a poor quality house, or staying with parents is not enough, - a motel in Rotorua?

There is a big difference between proactive and reactive maintenance.

Consider this, we were the first country to legislate a 40-hour working week. Which then freed up time for gardening, sports, even maintenance on a house.

Now we have one of the highest number of hours working in the developed world, household income used to mean one income earner, now it is mainly two, and yet there are only 24 hours still in a day.

Plus the quality of our housing has gotten worse, not just the newer homes, but many of the older homes missing the proactive maintenance now need a lot of reactive maintenance to get rid of damp, mould etc. which the house never had when newer and people had more time to look after them.

No one should be living/buying/renting many of the present housing stock because its crap, and expense crap. And due to the shortage of housing, you can't even buy them at the right depreciated discounted price needed to then spend the money on them to bring them up to warm, dry, healthy condition.

And we should be resisting the cultural change, which again is reactive to bad policy that has slowly eroded many of the things that we strived to get, ie a 40-hour working week that provided enough income to keep us happy, save for retirement, a healthy outdoor environment, a garden, and being able to look after yourself, and your home. Plus if your house was built to better quality, it would look after you.

The culture of what we are being forced into needs to change, and the mindset of the people to accept it.

by Zachary Smith | 19th Mar 21, 12:00pm 1616108435

I largely agree although maybe like evolution its not progression so much as adapting to a changing environment. The mass immigration to NZ in recent times has forever changed the culture and environment. Culture like other things that evolve are not designed. A designed culture is not what people want either.

Immigrants are more family focused than traditional Kiwis. Especially the cohort that arrived in 1995 - 2015. They pay their children's university fees and store up wealth specifically to pass onto their children. Meanwhile the children of traditional Kiwis have large student loans or don't go to university. They are thrown out to fend for themselves while the others get gifted homes often while their parents are still alive. Who will win this game?

by karl seastrand | 19th Mar 21, 2:17pm 1616116640

Zach.. your post identifies a further reason to stop the immigration tap. It is our ball so we decide who can join the game. Yes cultures evolve and when we see things taking a serious turn for the worst we need to adapt and change direction. People tell me we needed mass PI labour in the 70s and 80s and I accept that. Fine but things change and nothing is for ever. We are not obligated to continue with things that are not in the interests of NZ. Phase in new rules that reflect the current situation and what is best for our citizens.
I just do not accept that culture evolves and is not designed when it is related to mass immigration. We have designed a (immigration) system that will play a major part in dividing people based on wealth and for me that price is far too high to pay. We control the direction in which we move.

by Beanie | 19th Mar 21, 2:57pm 1616119029

It was surprising to note the spectators shown on telly at the Americas Cup racing were almost all European. Fair enough as it's not everyones cup of tea, but it does not reflect Auckland demographics at all. It seems that cultures are very slow to assimilate with one another, assuming that's what we want to achieve in our "team" of 5 million.

by RickStrauss | 22nd Mar 21, 5:27pm 1616387245

Dunno about this. Spending time with other agents as I do, and seeing online discussion forums, there are plenty of young people doing both these things: buying (or at least searching for, currently) a doer-upper, or living with their parents for longer and longer. Intergenerational houses that are the norm for some cultures are becoming far more common too with locals of many generations.

But the maths is still getting worse and worse for these folk.

Still...a society where more people live with grandparents and parents may not be a terrible thing, and may be far more sustainable in the long term. Though this does not mean we should not address the fundamental injustice of our present wealth transfer from the poorer and younger to the wealthier and older - or the tax-free nature of these wealth transfers.

by karl seastrand | 19th Mar 21, 11:12am 1616105576

I hope the upcoming announcement includes some serious action on the scourge of unoccupied dwellings. To be housing people in motels and have huge public housing waiting lists while there are over 40 000 unoccupied homes in Auckland alone is a disgrace. Contrary to how Ashley Church tries to spin it, there needs to be outrageously high financial penalties for anyone who chooses to compound our housing shortage by leaving their home unoccupied (for more than a few months).
By taking extreme, quick and decisive action we have nothing to lose and everything to gain. But I am not holding my breath as quick and decisive are two words that unfortunately seem to be missing from the Govt dictionary.

by Nzdan | 19th Mar 21, 11:26am 1616106383

Set up a "dobbing in" system like they have in Ireland.

https://vacanthomes.ie/

Instructions
1) Find a residential property that you believe to be vacant.
2) Fill in the form with as many details as you have. If you are standing near the vacant property use the Geo location button to get your current location.
3) If you have pictures of the property you can upload them. Or you can take pictures with your phone. Be sure geo location is enabled on your phone camera (it usually is). This will help us find the property.
4) You can also insert your email address to create an account. With an account you can login and see your previously submitted properties.

by Dale Smith | 19th Mar 21, 11:54am 1616108099

You forgot the bit, where if you can identify the religion and/or idealogy of the owner, you should put that down too. And also to better highlight the Geolocation paint a symbol on the door.

by delboy | 19th Mar 21, 2:53pm 1616118814

I suspect for the people going around reporting empty houses it’s less about the vacant house and more about envy.

by RickStrauss | 22nd Mar 21, 5:33pm 1616387638

I own property but I don't see the desire to address unoccupied housing as envy-driven. Just solution-driven.

by dago | 19th Mar 21, 12:19pm 1616109568

Sounds brilliant. I worked with a wealthy client in a nicer suburb of Wgtn, sharp as a tack at 93, she reckoned half the neighbourhood is empty homes

by b21 | 19th Mar 21, 11:36am 1616106974

Great point, I do not see anything extreme however in creating a framework which punishes owners of vacant homes in areas of high population density where the statistics confirm there is need for more housing. They could decide to keep it close if that's what they want at a cost of a CGT whenever the property gets sold equivalent to +100% of the gains for the period the house was closed.

by Dale Smith | 19th Mar 21, 12:08pm 1616108915

Karl, there are not 40,000 unoccupied homes. Stats. NZ are looking into this now (finally) but I have made an estimate based on an overseas comparable, here is my best guess:

It is regularly posted that Auckland, has over twice the vacant housing that Vancouver, Canada does, with the inference being that Auckland’s numbers are contributing to Auckland’s housing shortage and unaffordability.

But are they comparing apples with apples?
‘Govt stats. clearly shows Auckland 39,393 unoccupied dwellings and the same Stats depart http://archive.stats.govt.nz/methods/classifications-and-standards/clas… gives this definition of an unoccupied house:
'Unoccupied dwelling
A dwelling is defined for census use as unoccupied if it is: unoccupied at midnight and at all times during the 12 hours following midnight on the night of the data collection.'
An unoccupied dwelling is defined if it 'clearly has no current occupants and new occupants are not expected to move in on or before census night,' or 'dwellings that are being repaired or renovated,' or 'baches or holiday homes,' or 'where occupants of a dwelling are known to be temporarily away and are not expected to return on or before census night.'
IE a Gross figure.
Vancouver figures are net.

Vancouver figures: Out of the total 186,043 homes that issued a declaration (99 per cent of all Vancouver homes), 178,120 were occupied (owner-occupied or tenanted), Gross vacancy rate was 7,923, 5,385 were exempt and 2,538 were vacant. That is their net vacant home figure is 2,538.

This means approx 1 in 73, or 1.4% of houses in Vancouver are vacant.

So to compare apples with apples we need to use net figures and since we don’t have those for Auckland, the best we can do is extrapolate the Vancouver methodology to calculate how many vacant houses on a net basis does Auckland have?

Auckland has 540,000 dwellings and the 39,000 vacancy rate quoted figure is Gross. If you assume that its exemption rate would be similar to Vancouver this would leave a net figure of 12,480 vacant houses, ie a net vacancy rate figure of 1 in 43, or 2.3% houses in Auckland are vacant.

At best it could be said that Auckland has twice the vacancy rate as Vancouver, not 10x as much as some quote.

But we also have nearly twice the vacancy rate also at the national level, so for starters, a higher Gross vacancy rate would seem to be a NZ thing.

by Te Kooti | 19th Mar 21, 1:02pm 1616112121

So what if a house is unoccupied, the owner has the legal right to do with it as they please. What if they have a holiday house locally or abroad they use? If they did short lets I guarantee the neighbors would complain about that as well. The tenancy laws now make it harder to evict undesirable tenants so we are going to see more of this. I have an empty house in a holiday spot, not worth the drama to rent it so I let family use it occasionally.

by karl seastrand | 19th Mar 21, 2:38pm 1616117937

TK...would only apply to residential areas. That is where we have a crisis after all. 6 month leeway. You will find many owners of our unoccupied homes share a common trait with their Vancouver counterparts. At the moment you have the legal right to do as you please with an unoccupied home but most legislation (and some additional very high taxes) are designed to protect society. A holiday home abroad is not adding to the house crisis in NZ but unoccupied homes here are doing incredible damage and it is our Govts job to protect us from that, which is not difficult to do.

by Te Kooti | 19th Mar 21, 3:51pm 1616122299

I probably wasn't clear, If I spend a lot of time at the beach the Auckland house is empty. I'm very sympathetic to building more houses but going after unoccupied houses is simply daft and will never be a credible way to solve the problem.

by mfd | 19th Mar 21, 4:00pm 1616122823

I disagree. If you had to pay a tax of 1-2% of the value on your second home, would you reconsider owning two houses purely for your own use? How about 10%? Even if still no, plenty of other multiple home owners would reconsider, on the margins.

It's quite clear to me that taxing extra houses would discourage people owning extra houses, freeing them up for permanent inhabitation and acting to reduce the shortage.

Not the whole solution, but if we have an expensive resource with social consequences, using tax to encourage more efficient use of the resource is absolutely valid.

by Te Kooti | 19th Mar 21, 4:19pm 1616123968

That is the economics of envy sorry. I pay rates for both properties, employ local people to work on both properties, use services in both area's and so on. What is taxing me on one of the properties going to achieve? They do this in Australia and it just doesn't work because the tax is offset against income anyway, I just need to advertise it. You can't start taxing an asset without allowing me to deduct the cost of operating it. Property's are wrapped up in Trusts anyway, very easy to circumvent.

I tell you what makes people leave houses empty - taking away their right to evict bad tenants.

by mfd | 19th Mar 21, 4:37pm 1616125033

And if you or others were convinced to sell an excess property the rates would still be paid, the local people still employed, and the local services still used (more so, in fact).

Taxing the excess property encourages more efficient use of the resource. Rather than housing 1 family half the time, it houses 1 family the whole time, 2x the efficiency. At the extreme, if everyone in NZ has two houses, we need twice as many houses. The logic is extremely simple.

High property prices are clearly bad for society, people holding houses without using them efficiently helps increase the prices, tax is a valid tool to act against this.

You can use the envy argument against any tax - it's one of those cheap, throwaway remarks without any real meaning beyond 'let me carry on doing the harmful thing I'm doing'.

by Dale Smith | 19th Mar 21, 5:12pm 1616127149

So let's just keep going with that line of thought, after all it's about housing people in a housing crisis.

Every spare bedroom in any house should be taxed. This is an unused resource. This would make people either rent it out or sell and downsize into a smaller home.

The West Coast of NZ has a vacancy rate of over 20%, which can only mean West Coasters are more harmful than other NZers, according to you. Tax them twice as much.

The reality is taxing empty housing does not stop house prices from going up and does not increase the vacancy rate, see my reply to Karl about what has happened in Vancouver.

by Te Kooti | 19th Mar 21, 5:55pm 1616129709

If houses are sitting vacant then you can apportion some blame to not being able to evict a problem tenant for that. The law of unintended consequences. I do not believe there is a significant untapped resource of empty houses not being used. If I'm not at my main residence on census night it doesn't mean it's empty for example. NZ is just going to have to get used to more apartment blocks and townhouses like Sydney. 800 sqm single house dwellings within 10km of CBD are going to get scarce.

by mfd | 19th Mar 21, 10:55pm 1616147711

I think your complaints about how hard it is to evict tenants is clearly a red herring in your case, which is where this discussion began. Would you rent out your beach house if only you could evict bad tenants? I suspect you have the house for you and your family to use, which rather precludes taking in any kind of conventional renter.

by mfd | 19th Mar 21, 6:13pm 1616130790

The bedroom tax is not the ridiculous example you think - the UK used it, but obviously only for the poor:

https://en.wikipedia.org/wiki/Bedroom_tax

Obviously things are more complicated than this single issue can possibly fix. The low cost of houses on the West Coast means any such tax would have much less impact here than in places where there are housing shortages.

Certainly not a panacea, but I am certainly open to using tax to discourage people from having a second house, or paying the public more for the privilege to cover the externalities. At the end of the day, if I buy a holiday home, I deprive someone else from living in that house.

by Dale Smith | 19th Mar 21, 8:16pm 1616138183

We get all our worse housing policy from the UK, and it does get more ridiculous with hot bedding which is/was happening in NZ https://www.stuff.co.nz/business/115954442/workers-hot-bed-as-queenstow….

And you miss the point about empty houses on the West Coast. It's because people are leaving and they can't sell or rent them. So no one is being deprived of a home.

This is what our policies are leading to, and taxing 'empty house' only encourages and prolongs it, because it ignores the real problem and takes our focus away from the real solutions.

by mfd | 19th Mar 21, 11:00pm 1616148021

Not missing the point, just saying the tax would naturally act most strongly in areas where demand is strongest, thanks to the correlation with price. Holding a vacant home somewhere with shortages like Auckland would cost, say, 20k tax on a 5% deemed return, while an average vacant West coast house costs more like 4k.

Again, not the only solution and I only joined in the discussion to point out it could play a small role and would in my mind be morally justified. As I said elsewhere in the thread, I think I'd prefer a simpler deemed return type tax on all properties other than a main residence, not just vacant houses.

by Beanie | 19th Mar 21, 5:20pm 1616127659

The problem isn't not enough houses for the population, its too much population for the houses. And the hospitals, and roads, and water supplies, and and and...

by RickStrauss | 22nd Mar 21, 5:36pm 1616387794

It's envy driven in the same way that income tax is driven by envy. The envy of older folk who received affordable housing passed down from their forebears but lack the smarts and skills to compete for wages in today's Knowledge Economy and instead must rely on tax-free wealth transfers through poor housing policy.

by karl seastrand | 19th Mar 21, 7:04pm 1616133885

Tk..I agree with your first part but not many people would continuously stay at the holiday home for over 6 months.
On your second point, I agree that it will not solve the problem. Nothing on its own will but I believe it is a credible way to help solve the problem. There could be an avenue where people can claim dispensation based on very unusual circumstances but no rule is perfect. I really cannot see a good reason not to do it. If it doesn't help much then so be it, but I can't see any harm in trying, We are at the stage where we need to do anything that even might help to improve the housing crisis.

by Matt_B | 19th Mar 21, 2:30pm 1616117433

This article from last year which highlighted the problem with house and land banking.

According to the last census, there were more than 39,000 unoccupied dwellings in the greater Auckland area alone, a near 18 per cent increase in five years. That figure is higher than far bigger global cities. London, with a population of 9 million, has 25,000 empty homes, according to UK government data.

https://www.stuff.co.nz/life-style/homed/119636091/200k-empty-ghost-hou…

by karl seastrand | 19th Mar 21, 2:31pm 1616117494

Dale... what the 5385 exempt houses in Vancouver? Why do you not include them? Even if you are right and there are far fewer than 40 000 there are unquestionably thousands (probably tens of thousands ) of vacant homes in Auckland and it is adding to our housing crisis and something needs to be done.
It is not coincidental that you use Vancouver as an example where you have the male version of Jacinda; a bleeding heart/global village SJW who has sold his poor people down the river through mass immigration, all in the attempt to further his own self-image. Virtue signalling, two- faced (see black face and corruption scandals) grandstanding at its very worst.

by Dale Smith | 19th Mar 21, 4:57pm 1616126247

They are exempt for the same reason they are in NZ, ie houses empty on the night of the census because people not at home that night (on holiday etc.), houses empty between S&P settlements, or getting renovated, or people's baches etc.

Also when you look at the reasons for the problem and the solutions, then it is the wrong end of the stick. Councils like a tax because it is revenue to them. To quote Vancouver again:

'But the initial aim set out by former Vancouver Mayor Robertson, to encourage owners of those supposed 10,800 vacant homes to put them into the long-term rental pool, doesn’t seem to have worked. The City of Vancouver’s vacancy rate has shrunk again, to 0.8 per cent, despite this tax and despite the short-term rental restrictions that Robertson also put in place during his tenure. As was predicted to happen with the B.C. speculation and vacancy tax, it’s ultimately all about a revenue grab, despite the noble long-term rental intentions attached.'

And the tax/revenue grab is a low Gross (before council deducted costs/revenue) of $38 million, hardly making up for the billions of overinflated land value due to restrictions.

And with an empty house tax, Vancouver is getting worse sitting at 2nd of the demographic surveyhttp://www.demographia.com/dhi.pdf of unaffordable housing at 13x median income, with Auckland sitting 4th on 10x median income.

An empty home tax is a very blunt instrument and a poor financial substitute for fixing the underlying cause.

by karl seastrand | 19th Mar 21, 7:11pm 1616134278

Dale...I agree, especially with your last sentence. There are maybe 5 or 6 things that would help the housing crisis much more than an unoccupied residential property tax but I still maintain it would probably have some sort of positive effect. And maybe if Vancouver had set the taxes at 3 or 4 times more than they did....

by Dale Smith | 19th Mar 21, 7:51pm 1616136715

Yes, Vancouver has already increased the tax, that is how this revenue grab works.

The tax does make a few people sell and what happens is as the property numbers drop, the council put up the tax, so as to keep their revenue from falling. They will be aiming for the sweet spot of minimum numbers and maximum tax, ie they won't want the exempt property numbers to fall too low.

What you have to remember is that once a company is formed it is an entity that the people who run it, and for whom they earn their livelihood and get status (ie punishing bad people and getting people a few into housing) and will always, at least, want that entity to keep from getting smaller, if not grow in size.

Once formed they are almost impossible to get rid of and will always need revenue, even if the problem now does not exist (if it ever did).

by mfd | 19th Mar 21, 1:03pm 1616112233

Something like the FiF rules on foreign shares seems fair - applied to all houses you own except your main residence. You pay tax as if you received 5% of the RV of the properties as income - valuation is already seen to by the council so quite straight forward. A 39% tax rate payer would be paying ~2% of the value of their excess properties.

As for FiF, no need to report income or expenses related to the property so the tax return could be made much simpler for landlords. Sum values of houses, multiply by 0.05 = income.

5% deemed rate of return could be changed for various reasons - policy setting to help control house prices, linked to interest rates, whatever.

by ikimpaul | 19th Mar 21, 1:24pm 1616113463

Two things need to happen next week - all of which Australia put into place in 2017- and in both cases it worked and stopped speculation in the housing market.

1. Banks are capped on the amount of interest only loans on their books - Aussie implemented a rate of 30% (from a high of 45%) to be achieved within 6 months. Sydney and Melbourne housing markets dropped 10% accordingly over 18 months as credit controls tightened- a similar drop would be a good thing in NZ.

2. Victoria imposed a 1% tax on a house's value if it was empty for more than 6 months a year - so for those $1 Million empty houses in Auckland - that would be a $10 000 per annum tax - that will either encourage people to sell those houses or rent them.

by Albert2020 | 19th Mar 21, 11:27am 1616106453

Certainly feels that way when driving around Auckland. Single houses with a minimum of 600sqm are being snapped up and days later earthworks have begun to put multiple terraced houses on them. Terraced housing isn't for me but if they are built to a high standard (questionable) and add to the housing stock I am all for it.

by GV 27 | 19th Mar 21, 12:52pm 1616111531

The problem there is they are being added in areas with no transport and with a single car park, which means parking on the street. That works until everyone has turned their single-level house into six townhouses and there isn't enough room for everyone's cars on the road, or someone finally decided to belatedly paint a bus lane to serve an area where the population has effectively doubled instead of actually provisioning for rapid transit properly.

Meanwhile, inner city suburbs with link buses and other such frequent services just bring in the lawyers (or threaten to) whenever anyone suggests they should intensify like the rest of the city is doing in order to pick up their slack.

by RickStrauss | 22nd Mar 21, 5:38pm 1616387881

Gotta bit the bullet and significantly raise the land value portion of rates. But with council etc. infested with those receiving wealth transfers through the current model, who has the integrity to do this?

by b21 | 19th Mar 21, 11:29am 1616106591

Wow!! over 1000 new households per month in the last year is a whole load of record new houses available on the market every single month just in Auckland. Just concerned about the quality of some builds one can find around.

by karl seastrand | 19th Mar 21, 11:48am 1616107731

b21...the new build numbers are undoubtedly good but when we had about 170K (I think) long term visa holders arrive in NZ in the 12 months preceding Covid (the majority of whom end up in Auckland) it will have little effect on the housing crisis. And due to the culture and mindset of (many of) our new immigrants, unless changes are made this problem will grow exponentially through the New Zealand residency for sale system that is being operated by more and more "new" NZers.

by b21 | 19th Mar 21, 11:51am 1616107905

New immigrants are very unlikely to buy a new home, most come with very little in their luggage and take them years to save for a deposit, that's taking into account they will ever be able to afford one. Also, it is unlikely we will return to those numbers anytime in the next year or even longer, so this period will definitely be a breath of fresh air for housing to catch up.

by Nzdan | 19th Mar 21, 12:09pm 1616108988

Yet 127,000~ish more people have left the country than arrived according to customs border movements. https://www.customs.govt.nz/covid-19/more-information/passenger-arrival…

Mar 20 - 310k vs 373k
Apr 20 - 6k vs 32k
May 20 - 5k vs 10k
Jun 20 - 9k vs 15k
Jul 20 - 9k vs 18k
Aug 20 - 11k vs 14k
Sep 20 - 11k vs 15k
Oct 20 - 12k vs 13k
Nov 20 - 11k vs 13k
Dec 20 - 12k vs 17k
Jan 20 - 13k vs 14k
Feb 20 - 12k vs 13k
Mar 20 - Currently 7222 vs 7159

by Macrology | 19th Mar 21, 12:36pm 1616110567

The big arrivals numbers are people who arrived before COVID but stayed because of it. So it's before the data Nzdan has just posted. But it is still a good point - low/no/negative net migration since border closure has well and truly chomped away at the previous big arrival numbers. Year to March 2021 net migration numbers will be very low.

by Matt_B | 19th Mar 21, 2:21pm 1616116879

They are still minting new immigrants that are based offshore(less numbers due to covid though), mostly family members who are already in NZ and have been rubber stamped are bring the rest of the family over, that is why you are seeing so many new kiwis still arriving.
Some stats on mbienz website.

by b21 | 19th Mar 21, 3:23pm 1616120623

The parent immigration scheme is frozen due to COVID, people are having troubles even staying in NZ for those that made it here. Plus there is a 1000 per year cap.

https://www.nzherald.co.nz/nz/covid-19-coronavirus-freeze-on-parent-imm…

by CWBW | 19th Mar 21, 1:19pm 1616113158

Looks like the rising rent is supporting and incentivising new builds. Perhaps rent inflation is a good problem to have.

If I'm in the market now to buy, I'll be quick.

Real Estates are becoming Veblen.

by CourtJester | 19th Mar 21, 2:33pm 1616117638

How did you come to that conclusion? Correlation is not causation. The price of an Alpha Black Lotus card also increased during the same time period - could this also be a possible cause of the high number of new consents?

by streetwise | 19th Mar 21, 2:03pm 1616115833

Remember the pre-Beatles song "Little Boxes":

"Little boxes on the hillside
Littles boxes made of ticky-tacky"
etc

https://www.youtube.com/watch?v=2_2lGkEU4Xs

by Rob Reid | 19th Mar 21, 10:09pm 1616144951

Remember it well. When my grandad came to NZ in the 60s I remember him singing that one, disparagingly, while driving around the Hutt Valley before deciding to go back to the UK. My parents pointed out that at least these had sections, not just slammed next to each other in attached rows, but he had made up his mind.
When I go back to the Hutt it looks to me like most of the places I cruise past were already there in the 60s, so the ticky-tacky is hanging in there quite well.

by streetwise | 19th Mar 21, 11:11pm 1616148666

Rob
Those Hutt Valley houses are far from ticky-tacky...they are the original state houses built from the late 1930s to the 1950s, a Labour Government initiative. They might have been a little on the small side for the bigger families of those times, but they are among the sturdiest wooden houses ever built in NZ. The Key Government embarked on a programme to wipe them off the face of the earth and replace them with the 'Fibrolite' apartment-like tacky boxes you see today.

by Rob Reid | 20th Mar 21, 12:03pm 1616195025

Yes, older can be better.
Talking to my parents later, I realised Grandad was conditioned to view timber houses as inferior to brick, so for him it was simply a case of wood bad.

by nktokyo | 19th Mar 21, 2:36pm 1616117792

I hope the government considers that most of these homes are being built through individuals or businesses investing when they announce changes to discourage investment.

They won't, of course.

by mark.s | 19th Mar 21, 7:18pm 1616134727

I'm just going to put out my experience which can be be taken as anecdotal etc. I own a property on the North Shore, Auckland. I'm trying to build a large garage and an extension to the existing house. The section is sloped but nothing crazy. The earthworks alone plus some retaining walls and to get drainage and a 7k litre storm water retention tank (which is standard nowadays) plus concreting is over 110k. People who think you are building turn key realistic size houses for under 650k are dreaming.

by Nzdan | 19th Mar 21, 8:05pm 1616137545

Sounds like the quote(s) you have received are schmuck rates. They've got better things to do, but will throw a rate out there and hope for a bite?

by mark.s | 19th Mar 21, 9:04pm 1616141052

You may be correct. Can you better it or are you just passing by?

by Nzdan | 20th Mar 21, 10:38am 1616189924

Just passing by.

by james108 | 20th Mar 21, 4:14pm 1616210052

Much more cost efficient to do this at bulk earthworks stage for 300 lots rather than one off for a garage.

I work in construction and there is no money in one off mum and dad type small scale projects.

by Pusheen | 21st Mar 21, 1:12am 1616242361

IF NZ can built 3.5mil house for every local & future proof potential displace Kiwi abroad of 1.5mil house when they decide to return.. then 'supply' as per JA mentioned is sorted, just never mention about DTI or affordability side of it. In current govt & RBNZ view? - if house price is at say 1M? Kiwi can afford 300k, then the 700k can be held by govt sovereign guarantee debt cover - Complex matter, in NZ can be solved easily. Both Govt & RBNZ being choke held by OZ banks, nothing will change on that department.

by AdamJay1990 | 23rd Mar 21, 11:13pm 1616494439

It's a shame seeing alot of the nice villas bowled down for the abominations pictured in the article. Oh well I guess more people need houses to live in, such is progress? Would rather see them done up than bowled.
https://www.decltd.co.nz/villa-renovation-auckland