New home completions in Auckland may top 2000 a month in 2023

Seeing literally hundreds of these shoes box terraced houses going up in areas I frequent in Auckland. I imagine there is many more in other areas. Indeed, who is going to buy them all? They are hardly a first home for a family, you can barely live in them as a couple.

In fact, I got a mailer from a real estate agent just yesterday, talking up some local terraced houses and how I should BE QUICK (literally, lol). It reeked of desperation. Maybe 400-500k would be seem reasonable for what they are. Doubt they would part with them for them for less than 850-900k. 

And yet the government insists those earning even a cent above the median wage should be allowed to live in NZ permanently.

Many recent migrants working in hospitality and retail struggle to make ends meet, let alone muster up ridiculously high deposits for these shoeboxes. However, the industry wants more in the tens of thousands each year.

One house gets removed from a large section. 8 get put on it and approved by councils.

Now those intelligent council approvers, answer my few questions

1. What additional facilities did you create for those 8 houses when initially the facilities were planned for just one house and one family?

2. Where will these 8 people/families park their additional cars? Most of these 8 houses are one garage and most people don't park their car in the garage. So road sides get filled with parked cars.

3. What about the drainage and water infrastructure?

4. What about recreational facilities?

This new trend is creating micro slums in our suburbs and in few years this will become the bed of crime and hatred.

But our councils don't care about that they just want their money.

The alternative is to make big blocks of land available where a group of multiple storey 3-4 stories buildings can be built up, sold individual floor wise. Have a campus inside with swimming pool, park, clubhouse, open bbq areas. This will help a community feeling abd good quality of life.

But currently our councils do not have any long term thinking, they are just bunch of bureaucrats warming their bums on seats and getting paid multiple of six figure salaries. 

Not you obviously... never underestimate the demand and need of others HM 

The more new dwellings that are constructed in Auckland, the better...... because there's scarce other means of keeping the lid on house prices.

BUT, construction quality needs to be high. It's vital that comprehensive checks and balances are in place to ensure that's the case. 

TTP

I share your sentiment but I think a lot of immigrants (which it is pretty clear is the target market in many suburbs and the engine for housing demand overall) would consider these shoe boxes as standard, if not superior, to what they are used to.  Generalising again, they're not big on outdoor living either so tend not to value land size and privacy as much as NZ born. 

The cost of these unappealing (to us) dwellings is then the issue.  But then it is not unreasonable to suspect the purchaser possibly has access to funds from family and possibly the entire village back home, making it affordable without need for formal borrowing.  Speculating here again.

There are also, no doubt, super profits that have been made by many a developer and their subbies over the past few years. So if prices drop they might have to work with thinner margins and adjust back to lower hourly rates if they want to keep alive.  Supply might not fall as quickly as some think in the same way as it didn't immediately respond to price rises.  

I acknowledge however there will be a few developers that go bust near term and that will crimp supply to some degree.

When the option is a 800-900k "shoebox" or a 1.2m house i think people will choose the "shoebox"

Auckland in particular doesn't have the option to grow out any further, we have to grow up (as do some posters here). The "shoeboxes" are the future, like it or not. 

For once I agree with you, there will probably be a downturn later this year. Way too many issues with supply at the moment (very knowledgeable in this area). 

There's still room for upward valuation.

The beauty of being a bull is that there is always room for upward valuation. There is literally no upside limit.

It is tough being a bear as downside is limited to zero.

Will the property bulls step in and keep the price pumping? Or are they running out of ammo?

Yep, exactly. This data is very lagging in terms of what it might mean moving forward from here.

Hi Befuddled,

There ought to be sanctions/penalties on local authorities that are tardy/inefficient and hold up construction progress.

Local authorities have monopoly powers vested in them. The impression of many/most people (including some of their own staff) is that they exploit those powers to the disadvantage of the public. In other words, local authorities cause a welfare loss to the very communities that they are supposed to serve.

TTP

Yet as stated, 88% of CCCs are issued withing 2 years of consent being issued.  So your builders are the 12% outliers.

You are exaggerating massively. Or the builders you work with are beyond stupid.

You can't sell a house without ccc. You aren't even supposed to occupywithout one, but some do.

Standard period to get a ccc is 2 to 3 months after completion for an average house.