A new report on New Zealand’s house prices highlights crisis

A new report on New Zealand’s house prices highlights current crisis

Property Council reinforces its urgent call to action on the country’s desperate housing crisis as a new report names New Zealand “as the most expensive country in the world to buy property.”

Ratings agency Fitch has released its Global housing and mortgage outlook 2016 which puts New Zealand as the most expensive housing market in the world on a price to income basis.

Property Council chief executive Connal Townsend says the 14% year-on-year growth in 2015 is a damning indictment of the country’s housing market when compared to other countries.

“This is extremely concerning to us. We have a planning system in crisis with excessive restrictions on development which are hampering delivery efforts. Add to that burdening regulations and a construction sector unable to meet new housing demand, and we are fast approaching the point of no return.”

Property Council believes if the situation continues, housing in Auckland will become similar to Sydney’s; unattainable for the average Kiwi family.

“With Auckland’s population projected to explode, high regulatory costs and restrictions and a lack of cohesive integration between our three planning laws, it’s no wonder we’re doing terribly. But this isn’t just an Auckland issue.

“According to QV New Zealand, house prices are increasing in growth cities like Whangarei, Tauranga, Hamilton and Wellington at a rate higher than average salary increases. The average house price in Tauranga has increased by more than 18% over the last year.

“Skyrocketing house prices in these cities undermine the hard work of local councils and the private sector in making them attractive places to work and live in and increase their ratings base competitiveness.

“Right now, a number of Auckland apartments are pre-selling at more than $800,000. Considering the Reserve Bank lending rules for mortgages, these apartments are out of financial reach for many Kiwis.

“Only last year at our event Prime Minister John Key highlighted the benefits of apartment living, which we agree with entirely. But at this rate, how can we expect to get young working couples in apartments when they’re selling for more than what you would pay for a decent 4-bedroom house in Los Angeles or the Gold Coast?

Property Council is passionately pursuing solutions and is providing extensive feedback to reviews by central government and the Productivity Commission of New Zealand’s planning systems.

“We will continue to push for decreasing bureaucracy and red tape which is reducing the effectiveness of the development community and will readily work with local and central government towards mutually beneficial solutions to get more Kiwis into their own homes.”

ENDS

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