Speculators should face rate rise
There are two empty houses in my street. A couple of months ago they were put up for sale by auction and before the big day, lots of people turned up to view.
Couples and family groups appeared to be outnumbered by dispassionate, suited representatives, presumably acting on behalf of investors and property trust groups, because since then, these four and five-bedroomed family homes have never been visited by a removals van, and lie silent.
In a family area, empty homes create an eerie atmosphere, contrary to what a residential street ought to represent and how it should live and breathe. And there is a feeling that something very wrong and unethical is going on under the community’s nose.
As our very erudite Sunday Business columnist Martin Hawes has said many times in his columns, there is a very important difference between investment in property and speculation.
Investment in property is generally a good thing. A home is probably the biggest and most expensive purchase most of us will make. It involves taking on debt, but that is worthwhile because it is secured on an asset which will benefit families as a whole longer-term. Even second homes, used periodically or rented out for income and eventual capital appreciation, have a human purpose to them.
Buying property for the sole purpose of sitting on it, until a super-heated market can deliver a few hundred thousand bucks more in value however, is different and instead allows a remote brand of ugly greed to win out.
One of the best ideas I’ve heard to combat this so far has come from Auckland’s mayoral hopeful, Victoria Crone, who wants to target houses which are demonstrably not lived in, via their rates bill. A hike of 50 per cent could prove to be a deterrent to speculative buying, although it is a drop in the ocean compared to the big bucks from equity growth.
Why don’t we go one step further and impose an outright ban – even a moratorium of a few years would be useful – on purchases by people and organisations who have no intention of using property investments as places to live.
The situation in some of NZ’s cities is now so critical that it requires legislative control. Even the most dynamic of new building programmes will merely be filling a shop window for the fortunate few if those properties are bought by investors, while young people and families are left on the sidelines, unable to get their hands on a first, or bigger home.
If this situation is left to fester then it will fuel anger and frustration that will coalesce to bite back at the establishment that continues to feed it by turning a blind eye. We only have to look around the world to see that in action.