As a result of a recent Productivity Commission’s inquiry into home affordability, the New Zealand Government is currently working on ways to reduce house prices. Auckland is seen as the worst affected city in New Zealand. Currently Auckland is ranked as one of the World’s most expensive cities to live, with house prices around six times the average wage of the people living there.
This discussion is not new. Over the last 10 years New Zealand has been part of a property boom that has seen house prices increase all over the Country. In fact when incomes are considered, many of New Zealand’s centres have become expensive to live.
Reasons for the soaring cost of housing in New Zealand is varied. In Auckland is it primarily a case of supply and demand. To keep up with population growth, Auckland needs 14,000 new homes to be built each year. Currently, only about 7,000 new homes are making it to market, and therefore demand is not being met. This market anomaly drives up the price of housing.
The Commission’s report identified one of the problems as being a significant lack of land available for building new homes in Auckland. This is mainly due to Council promoting high density housing, rather than opening new parcels of land for development. This has resulted in more Auckland city suburbs reaching the million dollar mark. Other Councils across the country are also holding back land development to reduce the cost of infrastructure for services such as wastewater treatment.
The government plans to speed up the consent process for new homes, making it easier and cheaper; through changes to the Resource Management and Local Government Acts. This will take time however, and even the government is taking a cautious, go slow, approach so as not to affect house prices too quickly. The reason for this is that most New Zealanders have their house as a retirement investment. So change won’t be happening any time soon.
In the mean time, what many people are unaware of is that for half the price of an average house in an outlying Auckland suburb you can buy a house and land package in a coastal centre such as Gisborne. With house and land packages, developers have usually chosen stunning locations in new subdivisions. Not only do you get to choose your section, but you get a selection of house plans to choose from, all within your budget. Imagine living in one of sunniest parts of the Country, and having enough money left over to enjoy life.
The Gisborne District Council website outlines business opportunities in the region, and with nearly 3,000 existing businesses there are plenty of employment opportunities also. Envisage a new home, with a decent size section, and a low stress lifestyle. Moving out of the city is not only a great idea for you, but your family will benefit from moving away from the stresses of city life, especially the relentless traffic.
So if you are one of the unlucky people finding it difficult to find a decent property for your dollar, think about a house and land package in another centre to get more value for your money. With mortgage rates at an historic low, now is a great time to build.