Many buyers face lifetime paying rent
Demand outstrips construction in Auckland market.
‘‘NOW IF you happen to own an apartment in Auckland, New Zealand, the high rent returns, other people’s money – around half a week’s pay for most people – could be paid to you as rent each week.’’ That is the opening line for an advertisement running in Singapore, Malaysia and Queensland inviting investors to make a fortune from Auckland’s housing crisis.
It is an appalling indictment when more and more Aucklanders face the prospect of renting for a lifetime and spending half their hard-earned income enriching foreign investors.
To rub salt in the wound the advertisement continues: ‘‘There’s no stamp duty, no land tax and within New Zealand generally no capital gains tax either. It’s an investor’s dream.’’
Prospective investors are invited to call a number ‘‘if the idea of people in New Zealand giving you hundreds of dollars a week appeals’’. The advertisement reveals what the Government pretends is not happening.
There is a crisis in Auckland as housing construction fails to keep up with demand. This results in huge house price inflation, with average prices rising by some $90,000 a year. It is pushing house prices beyond the means of firsthome buyers.
Home ownership in Auckland, once more than 75 per cent, has dropped to close to 60 per cent.
Real estate agents report 40 per cent of house buyers today are property investors.
With property sales in Auckland averaging $750,000 last month, more and more people are being locked into renting.
The housing crisis also means rents are spiralling upwards at a rate close to four times the overall inflation rate. It is a vicious circle, with people paying so much in rent that they cannot put together a deposit to buy a home.
The Government makes much of allowing those in KiwiSaver to access the tax credits on money they have in the scheme to use toward a deposit.
In fact, all it means is that couples get $10 more a week towards their deposit while Auckland house prices are going up by $1700 a week.
An important part of being a New Zealander is the expectation that we and our children should be able to own a home. But this is no longer the case.
The market has failed to provide enough homes and tinkering with resource consents won’t fix it.
No-one in the Government has explained how selling off of thousands of Housing NZ homes will help. For New Zealanders on low incomes, social housing is the only way they can achieve decent, affordable and secure homes.
According to the response from the Government to an official information request, no social or economic analysis has been done on the impact of selling 8000 state houses over the next year. That is irresponsible and a disgrace.
It is time for the Government to take the blindfold off and cooperate with others to better address the housing crisis. Current policy is not working – except for overseas investors!