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A fresh approach required to increasing housing stock

By Paul Lochore FREINZ

I’m looking forward to seeing the fresh approach of the new coalition New Zealand Government. But while there are many positive initiatives, there are for me still several question marks.

Planting 100-million trees annually in a billion trees planting programme is very exciting and ambitious and, hopefully, achievable. The initiative will be beneficial environmentally and it will also create employment.

I’m also excited about the promised billion-dollar annual regional development fund. New Zealand provinces have been long neglected and this will give them a desperately needed shot in the arm.

There are also some very encouraging social policies. Most New Zealanders are very fair people and recognise that people struggling at the bottom end of society need a helping hand.

I also 100% support the ban on non-resident buyers of existing homes. We need buyers who have a stake here that’s more than just financial, they need to be committed to living here and be willing to be part of our community. The establishment of a register of foreign-owned land and investments is also long overdue.

And of course we need more homes and more affordable homes – particularly in Auckland. However, with any housing policies, there always seems to be a yawning gap between theory and reality. In Auckland it will require the Council to become more productive. How can the new coalition government make Council more productive and effective in order to achieve its housing goals?

Another reality is that building low-cost housing isn’t high on the priority list for most developers because high-end housing is more profitable. That’s the market finding its own level. Whether this is good or bad will depend on your values.

But the biggest reality check is who will build all these extra houses Auckland so desperately needs? We still have a chronic shortage of qualified tradespeople and materials. And this is reflected in contractors’ rates. Chippies are now demanding $60 + GST per hour. Half of them aren’t even qualified.

If construction giants such as Fletcher Building struggle with cost over-runs on big projects with fixed contracts, such as the Justice Ministry’s new Christchurch precinct, how is the average Jo Bloggs construction company meant to survive? There are too many projects and not enough resources to take them on. Many developments aren’t profitable.

Half of the country’s state houses are in sub-standard condition. There simply aren’t enough skilled human resources to fix them. Which brings me to the thorny issue of immigration. Can anyone explain to me why we aren’t bringing in more qualified and experienced builders? We do not need more migrants who have gained residency after completing low-level business courses at private training institutes.


And any new migrant builders need to speak English, to conform to New Zealand building standards, to understand our culture and be committed to building quality, not sub-standard, dwellings. Instead, we’ve had migrant construction workers brought in on temporary work visas who aren’t up to scratch. The legacy of this low-standard construction will be raising its head in the years to come.

While on the topic of building standards, a roof collapsed on a construction site in Albany on Auckland’s North Shore a week ago (late October 2017) that left seven people injured after falling over 2.5 metres. How can this sort of accident happen if Building Code standards are being applied?

Here’s another reality check. Just who is going to finance new housing developments? New Zealand Australian-owned banks haven’t been lending money to local developers for the past six to eight years. When our finance companies went bust in 2008, there went the finance, because they were the lenders to our developers. Now the Chinese and their money laundering have taken over. The majority of apartments being constructed in New Zealand are financed by Asian investors. They bring in their own people on temporary work visas and if they can take short cuts they will.  I know how this might sound – but it happens to be the truth.

There are five developments right now in Birkenhead on Auckland’s North Shore that have resource consent and are ready to go. But the developers want to sell them before the first sod is turned. Why? Because there’s no profit. No one wants to buy the land or the development plans. No New Zealand finance house will help them because there are no loan facilities left in New Zealand for these types of projects. Take the huge planned Milford Mall development. It was going to include an expansion of the Milford shopping centre and three apartment towers – now canned. Banks pulled the rug out from under. Twenty-four apartment buyers had already paid their deposits.

This is the reality.

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