Across the ditch in New Zealand the property boom in Auckland seems to be causing all kinds of grief for the country.
Recently a high level summit was held to try and solve the Aucklands spiraling house prices and there is no question if there is a boom, even the popular TV show “The Block” stunned the country when the winning property fetched 1.5 million and the losing property still bought home $1.3 million.
The recent residential development summit suggested:
• Reform the Resource Management Act to speed up new supply (Nick Smith)
I’d agree with this one, go Nick.
• Open up more land for development faster (Shamubeel Eaqub)
Another good idea, more supply to match the demand. Makes sense.
• Make banks hold more capital as a buffer against a downturn (Mr Eaqub)
Not sure why this would make housing more affordable.
• Remove tax incentives on rental property (Mr Eaqub)
I don’t want to say stupid idea but it really is. The Australian government tried this in 1984 and all it did was result in a massive shortage of property and then the government had to increase incentives to get investors back into the market. The tax benefits are not sufficient enough to curb the desire for property as an investment.
• Establish new council-owned Auckland Development Agency (Penny Hulse)
Not sure about this one. I don’t know enough about how it would work to comment.
• Acknowledge and further the work of the council’s Housing Project Office (Nick Smith)
Again I don’t know enough about the HPO to comment.
On the other side of the coin, the prime minister recently suggested that first home buyers look at Apartments. Kenyon Clarke from DuVal group thinks this is a great strategy as he currently has 151 apartments for sale at the Lake Wooddevelopment starting at $459,000.
Most of this article I got with permission from the folks at Affordable Homes