Plenty of affordable homes in Auckland

Property

An Auckland Council report finds almost 40% of Auckland homes sold last year were affordable for first home buyers

8th Oct 14, 4:59pm by Greg Ninness

<a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

By Greg Ninness

Auckland Council has produced a 45 page report that looks at how housing affordability for first home buyers has changed over time in different parts of the city.

It's titled Spatial Trends in Dwelling Prices and Affordability for First Home Buyers and has been produced by four researchers within the Social and Economic Research arm of the council's Research Investigations and Monitoring Unit and then "peer reviewed by the Peer Review Panel using the Panel's terms of reference."

So it sounds like it kept quite a few people at the council busy for quite some time.

And its certainly full of surprises.

Like most good reports, its main findings are nicely condensed into a few key points in the executive summary at the front.

This jumps straight to the chase with the startling revelation that "areas within the central city, such as Parnell, Herne Bay, Ponsonby, Devonport and Epsom have the highest dwelling prices relative to the Auckland average."

Wow. And there's more.

"In contrast, many of the areas within western and southern Auckland such as Otara-Papatoetoe, New Lynn and Mangere have lower dwelling prices relative to the Auckland average."

Amazing. And still they come.

"Between 1982-1990 and 2008-2012, dwelling prices have increased most rapidly in areas around Hobsonville and Whenuapai, in central city areas close to the city centre such as Ponsonby, Grey Lynn in Devonport and on Waiheke Island."

And just when you thought you'd heard it all, there's:

"The areas with the lowest rate of change include areas of southern Auckland including Wiri, Bombay, Papatoetoe and Papakura."

But then the report comes up with something that really is surprising.

According to the council's researchers, "the share of sales categorised as affordable has fallen substantially during the study period, from 74% in 1999 to 39% in 2013.

"This trend has been relatively consistent throughout Auckland, for both larger dwellings and the total market," the report said.

What is truly surprising about that finding is not that the market share of affordable homes has fallen so much, but that the council considers that nearly 40% of the homes sold in Auckland last year could be classed as affordable for first home buyers.

Auckland's first home buyers and working poor will be doing cartwheels in the streets once they find out that there so is so much affordable housing out there.

If that's the case, all of the effort, or at least all of the noise the government is making about creating more affordable housing in the city may be misplaced.

Apparently there's already plenty to choose from.

If you'd like a read, here's the link.

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16 Comments

by BigDaddy | 8th Oct 14, 9:15pm 1412756138

No doubt the Coucil wasted heaps of rate payer money in preparing their report.

If they had read Olly Newland's insightful article "What shortage and why the fuss?" (as can be seen on this very website even now) they would have come to the same conclusion free of charge.

extract:

"Is there is a housing shortage at all what is what is driving all the arguments?

It is this constant drum beat that there is a “crisis” that is whipping the screamers into hysterics.

In actual fact there is no shortage of houses in Auckland or the rest if the country for that matter - with parts of Christchurch maybe being the exception.

For the record there are over 1,500 2-3 bedroom affordable houses for sale on Trademe under an $400,000 in the greater Auckland area today.

These would house up to 5,000 people immediately.

This excludes apartments, units, sections or listings on other websites.

And - wait for it - there are another 25,000 more such affordable houses for sale throughout the country.

So the two questions that need to be asked are:

What shortage and why the fuss?"

by Kumbel | 8th Oct 14, 9:26pm 1412756780

;-)

by Brendon | 9th Oct 14, 12:22am 1412767378

Oh Big Daddy you are up to your old tricks again. My Trademe search showed 997 listings for Auckland 2 or 3 bedrooms up to $400K. At least half the listings on the first page were auctions and tenders. A lot of others were apartments or units -some quite nice looking but not the houses you specified. So my guess is that there might be housing for less than 1000 at the 'affordable' level of $400K..

by raegun | 9th Oct 14, 8:35pm 1412840138

There'll be plenty of double ups in there too, properties that are listed with more than one agent and $400k is not affordable for a whole heap of people who could have been able to buy a couple of decades ago

by hamish@mortgag… | 11th Oct 14, 11:40am 1412980806

Good point Big Daddy, boo hoo first home buyers have to buy a house that is in a cheap area. Well guess what, thats where you will find them at a lower price.

by frazz | 8th Oct 14, 10:49pm 1412761798

Auckland's first home buyers and working poor will be doing cartwheels in the streets once they find out that there so is so much affordable housing out there.

Yes the fibrolight shit boxes are there for the taking...just negotiate with Big Daddy...he knows the market better than anyone.

by Zombie ponzi | 9th Oct 14, 12:36am 1412768170

Gold!

You'll only need an $80k deposit! (merely 8+ years saving on a low wage)

You'll only have to commute for around 1.5 hours each day! (merely $100 in petrol each week)

You'll only have to take out a 30 year mortgage! (merely double the cost of your home in interest)

Its only a short walk to the park! (of course your not getting a back yard for $400k)

The report uses unreasonable measures of affordability - the 30% of income measure is based on GROSS income, two people working in the household...and only the price of the dwelling is taken into account (not rates, insurance, maintenance,etc).

So in reality probably 10% or less of properties are "affordable" and these will be miles from most jobs - and forget having children, both parents will need to stay in work to cover the mortgage.

by Pragmatist | 9th Oct 14, 12:22am 1412767347

"....Social and Economic Research arm of the council's Research Investigations and Monitoring Unit and then "peer reviewed by the Peer Review Panel..."

Is it just me, or does reading the above sentence sound like $600,000pa of unnecessary council payroll expense?

by jr19 | 9th Oct 14, 8:11am 1412795466

The headline had me at "Council Report.." , then I wrecked my new keyboard reading "peer reviewed by the Peer Review Panel...".

I can imagine the "Review" :

"Peer":"Umm there shouldnt be a full stop there..aaannnd there.."

"Researcher": "Whoops shorry thats thum of the Grange Hermitage 1951 I wash drinking when I was researchun"

"Peer": "All good then, cant see any other issues, got any claret left?"

"Researcher": "Dush it sound like it?"

by notch | 9th Oct 14, 3:57am 1412780251

Honestly, I think that if you meet an Auckland council worker you should slap them, and quote thier own "peer reviewed" survey.

Slap a Council worker a day makes the pain go away? If only.

Auckland: forget kids, even if you have enough $$ to cover them, you won't be able to spend any time with them after the hours you will need to work, and commuting you'll need to be doing.

Actually it's not even that great if you are loaded, you still have to sit in traffic for hours because the same incompetent council that pushed up the biggest cost of living (housing) has also done sodd all about transport infrastructure.

74% to 39%... you should be ASHAMED.

by Steptoe | 9th Oct 14, 9:24am 1412799858

Here we go agaon, pen pushing desk top statsticans going thru trade me digging out "affordable " homes

I wonder how many of these guys

1/ got off their chuffs and went out and inspected these "affordable houses" let alone have the experiance to sit down and do the maths as to what is involved INCLUDING COUNCIL PERMITS and INSPECTIONS to bring these homes up to a reasonable livable standard

THEN added those costs onto the price of the house, AND included into bank mortgaue required... because there is no way a 1st home buyer can afford to turn a run down, holes in the wall, uninsulated, paint peeling , roof leaking, floors and flooring need replacing etc .

2/ Followed thru with EACH of these homes to see if then re sold within the next 2 to 6 months after been made into reasonably livable homes.. Then decide if that house quailfies.

And out of interest, approx 30% of "affordable houses" over the last 4 or 5 yrs fall into all of the catories above out of total sales.

Once again we have overquailfied desk jockies justfing their existance to draw over paid salaries from rate payers payers money....

Its a shame Campbell or similar dont get their teeth into this and run with it.

by Uninterested | 9th Oct 14, 9:30am 1412800200

Please be a bit careful. Many of the houses listed for sale will have people living in them already. So these people will be displaced when the house sells. Or just remain there if it is rented out again.

by avatar99 | 9th Oct 14, 10:06am 1412802415

Why on earth are we paying saleries for council researchers?? Isn't that what we have universities and CRI's for? And then they go and do a report that duplicates information available from other sources (e.g., Roost Homelone Affordability Index) - and it sounds like a poor job at that. Grrr!

by waymad | 9th Oct 14, 10:14am 1412802873

Truly, people with real economic credentials within Councils Are, as the Left Honorable Larry Fool avers, as rare as rocking-horse poo....

by B-Rocker | 9th Oct 14, 11:14am 1412806468

Completely out of touch with reality. I support Zombie's comments. Using all of your double income towards paying your house off over 30 years, after you have saved for 8+ years, on a house that is miles away from your work place, is NOT affordable housing.

by Sosua | 9th Oct 14, 1:14pm 1412813661

While I agree there are obviously some affordability issues going on, if you are on a decent income (or have two average incomes) and are fully comitted, it can be done.

I recently bought without any financial assistance from baby boomer parents on a single income, saving my 16% deposit in just over two years.

I purchased a nice stand alone house in a goodstreet in an average suburb 12km (25-30 minute commute) from the CBD where I work. I was lucky enough to win an auction that didn't get too crazy with a little cash leftover to put a few finishing touches on the place.

My mortgage is extremely affordable and I plan to have it paid back inside 15 years.

Of course I realised I didn't need a 4 bedroom house and that I wasn't going to be able to buy a Villa in Grey Lynn where I've flatted for the past 7 years so I reset my expectations and worked towards them.

I just wish I had got my stuff together a few years earlier.