Housing market outlook uncertain
‘‘Homelessness remains a reality for some time into the future at this rate.’’
In a special report, ‘Outlook for the NZ housing market – Speed bump or sink hole?’ Kiwibank economists (Zoe Wallis and Jeremy Couchman) note the housing market has ‘cooled convincingly’.
They attribute that to a variety factors including affordability constraints and tighter credit conditions.
Regardless, there remains a gap between supply and demand that is unlikely to be corrected in the near term with the outlook for the housing market over the year ahead remaining uncertain.
In Auckland, the median house price to income ratio is running at over 9x which means that saving a deposit and paying the mortgage are a higher hurdle for the average household.
Should house prices and mortgage rates continue to rise they will put additional pressure on affordability.
In Auckland, the population growth rate over the year to June 2017 was 2.6 per cent or equivalent to an additional 42,700 people.
That equates to around 15,800 additional houses needed to have been built in Auckland over the past year to keep pace.
In reality just over 10,000 homes were consented with an estimated 7 to 8000 of those actually getting completed.
Practically none of the social housing commitments which enabled many of the housing developments to go ahead were delivered.
In Auckland we started off with an estimated pre-existing shortage of 30,000 – 40,000 dwellings.
It’s not hard to do the maths – in short we are a long way from winning.
Homelessness remains a reality for some time into the future at this rate.
There are few more important needs that we as people have than housing.
Housing, when properly done, is a source of security, shelter, a form of identity, and for some who are fortunate, a path to accumulating wealth.
When done badly, it is none of those things.
It’s a source of angst, anxiety, and in some cases, a path to poverty.
It seems there is a similar problem in Australia where a leading economist, Saul Eslake, has warned that declining home ownership rates among younger people is a major contributor to rising inter-generational wealth inequality in Australia.
Dr Cassandra Goldie is the chief executive of the Australian Council of Social Service.
‘‘One of the realities with what we’ve allowed to happen with housing in Australia, where policy has overwhelmingly been driven by vested interests – in particular those involved in accumulating more wealth through property investments – is that the people living in the housing that is the subject of all this property investment have been virtually forgotten,’’ Goldie said.
As more people are forced to rent their rights come into focus.
Because the human impact of people being evicted from their home without any ability to have a voice in that process, has meant that most people live with constant, underlying stress that they may have to move.
In Australia the community advocates are arguing very strongly for measures that address homelessness, greater investment in social public housing and making sure that they’ve got homelessness services that are able to meet the extraordinary demand that’s out there in the community.
It’s all a bit deja vu really – and a hell of job for the incoming Government.
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