Regardless of the current easing of the Auckland market it is very clear that there are no indications of a sudden drop in house prices. There are also no indications of a sudden increase in the amount of money being earned by average workers such as teachers and nurses.
I am not surprised to read of examples of those average workers considering their options including leaving Auckland to achieve their dream of owning their own home. Over time it is clear that more and more of them will also be considering their options.
However, there will also be a time when there simply won’t be enough jobs out of Auckland to support them and the issue of unaffordable housing will still loom large. The issue exists in every large city around the world and there are no indications that it is being solved.
We in New Zealand seem to believe that building more houses and apartments is the answer although we have no idea of who is going to build them or how they will finance it. If simply building more homes was the answer to housing affordability then why hasn’t this solved the problem in other large cities?
I believe that the bigger Auckland becomes (whether in width or height or both) the more it will attract people and businesses wanting to be part of it. This will continue to feed the demand and that will continue to feed the price rises.
There may be some short term downturns which will impact prices but clearly over the long term Auckland will continue to become more and more expensive. This will inevitably lead to a reducing percentage of our residents being able to own their own home.
What planning is being done to ensure that there are enough investors willing to provide the homes they will live in? And what protections are being put in place to allow them to live with long term, secure tenure? These workers need to know that they can live in their home for as long as they wish.
Rather than making it more difficult for people to own rental property we need to be finding ways to encourage it but with investment being the foundation not speculation.
Speculation is the elephant in the room that no-one is willing to talk about but it is the reason that there is so much animosity between those with money to invest and those needing homes for their families.
Currently the only control on speculation is the tax payable when a property is sold within 2 years or if it can be shown that the investor bought the property with the intention of selling it when the value increased sufficiently. Once the 2 year limit has passed then trying to trace sales and prove intent is virtually impossible.
Property investment is an essential part of our housing mix in New Zealand and it is becoming more and more important in Auckland. I can’t wait to hear what our political parties will be doing when the next Government is formed to put in place strategies to ensure that at least affordable, long-term rental homes are available to Aucklanders if they can’t afford to buy. At the moment the silence is deafening.
Advising Auckland property buyers