Housing disaster waiting to happen

The Government’s rules reduction taskforce proposal to allow builders to self-certify their work should concern us all.

Even more worrying is that Housing Minister Nick Smith didn’t knock the idea on the head as soon as he heard about it. Instead he’s asked officials to explore the concept further.

Many property owners are still grappling with getting their leaky homes put right; it’s an issue that can be traced back to the 1990s and we are still paying for it. Now some paper clip-counting knuckleheads want to risk another disaster.

When the leaky building issue seeped into our headlines, many of the companies that built those homes couldn’t close their businesses down fast enough, wash their hands of the issue, and start a new limited liability company to carry on trading. Taxpayers have stumped up millions of dollars to fix these homes.

The Certified Builders Association supports the idea of self-certification, but the organisation is not in the business of consumer protection. And we still have reports of Auckland Council building inspectors coming across shoddy workmanship on building sites.

The idea of builders self-certifying their work should be kicked out of play now.

Survey

Real estate data firm CoreLogic surveyed 125,000 of its customers to get their take on the property market.

The vast majority of the 16,000 respondents are aged over 40, leading the firm to conclude that the “younger generation were still struggling to get on the property ladder”.

According to the survey, the most popular reason for buying a property was for an investment (31 per cent) and the key factor when selecting a property was the option to add value. Homeowners in Auckland said their biggest concern was council rate rises.

Of those planning to buy, 60 per cent will do so with a partner, and 4 per cent will be helped by their family.

CoreLogic says no matter how positive Kiwis feel about real estate “there are some very real property concerns out there”.

Migration

So far this year more than 117,000 migrants have arrived in New Zealand. Take away the 57,000 people who left our shores during the same period and we have a net gain of more than 60,000 people.

Although the Government may be pleased with the money they spend into the economy, it could be argued that one side effect for Auckland has been higher prices for real estate.

According to the Real Estate Institute, median city prices rose more than 20 per cent to $740,000 in the 12 months to August — although the rate of increase has cooled.

Which is perhaps why those buying a home require a 20 per cent deposit, the Government doesn’t want to risk our major lenders being tied to property that’s worth less than the loan used to buy it.

However, the level of current migration is exceptional when compared to the long-term average. But when it returns to “normal” levels, along with dozens of apartment and housing developments coming on stream, and property investors cashing up, the pressure on Auckland property prices should ease.