Bills to run a home go through the roof
The costs of owning a house have soared.
But an attempt to help would-be buyers easily estimate the ‘‘opex’’ (operational expenses) of properties they’re looking at has stalled.
Since the last quarter of 2011, inflation as measured by the Consumer Price Index is up 7 per cent.
The cost of maintaining, insuring, and paying rates on homes has far outstripped the CPI, and for some Tower Insurance policyholders, the rises have been far greater.
But a Homes.co.nz project to build a suite of tools allowing prospective homebuyers to get British-style estimates of running costs of homes on the market has not progressed.
The plan was based around the British Zoopla model, which provides an estimate of the cost to insure, heat, and pay council taxes on each house on the market.
But though the need for the tools had increased, it was proving difficult to get the data needed to provide the estimates, said Tom Lintern from Homes.co.nz.
‘‘Long story short, we haven’t quite got the data,’’ said Lintern.
One problem was the extreme variability of the cost of heating homes, caused by the extreme variability of quality in building.
‘‘It turned out that there’s a very large variability across houses, and it is more reflective of the type of people living in them, and the quality of the homes,’’ he said.
‘‘The standard here is definitely poorly insulated homes, and then it comes down to if people are willing to pay for the lifestyle and turn on the heaters.’’
Insurance was the other cost that Homes.co.nz had not solved for its website, but Tower’s move to start pricing individual earthquake risk has raised the prospect of very high annual costs for some homeowners.
Instead of sharing the risk evenly across all the homes it provides insurance on, Tower now sets premiums based on individual risk, meaning property owners in earthquake-prone areas pay more, especially those living on hillsides, or clifftops.
That’s resulted in premium increases for around 3.5 per cent of the homes Tower insures – some as high as $5000 – which chief executive Richard Harding believes is roughly the national proportion of homes across the country with heightened earthquake risk.
Next, Tower was going to price individual flood risk.
Harding believed the two giant insurers IAG (NZI, AMI, State) and Suncorp (Vero, AA Insurance) would follow suit in the coming years.
The cost of owning homes has shifted massively since the final quarter of 2011, though Lintern believed many homeowners had not paid much attention to the rising ‘‘opex’’ costs as they have been too busy enjoying the capital gains.
Figures from Statistics New Zealand show that although CPI was up by 7 per cent since the last quarter of 2011, the cost of home maintenance materials was up 10 per cent. The cost of home maintenance services rose 22.7 per cent.
Rates (ignoring regional variations) went up 26.2 per cent.
And house insurance, excluding contents, rose a staggering 128 per cent, but that did not include the rises just announced for some Tower policyholders.