$1bn loan won’t solve Auckland’s housing crisis

For a man who routinely says that throwing money at problems is not the answer, Prime Minister John Key’s $1 billion offer to help solve the country’s housing crisis is a huge U-turn.

Key told TV3 news on May 16 that: “Throwing more money at Auckland’s housing crisis isn’t the answer and freeing up land supply is.”

But he has now offered an interest-free $1 billion loan to local councils to pay for infrastructure such as roads and utilities to pave the way for new housing developments.

However, the offer is late, it’s no where near enough money and will increase the rates of any council that accepts the loan. Not one cent will be used to build homes.

It’s not really interest-free money of course because the Government is borrowing it from somewhere. The piper will need to be paid.

Land snatchers

The other week I mentioned that developers were sitting on land because rising values mean they make more money doing nothing than building much-needed homes.

This week Housing Minister Nick Smith says he may compulsorily purchase land from land-bankers.

We are living in interesting times when the party of free enterprise, business and self-determination talks about snatching people’s property. A dictator would have done this years ago, but things run a bit slower in a democracy.

Look north

Northland is the new hot spot for home buyers according to realestate.co.nz.

The firm’s CEO Brendon Skipper says interest in the Auckland property market has dropped with average asking prices having risen last month to more than $888,000.

He says the number of users searching Auckland houses “for sale” fell by more than 19 per cent compared to the same time last year.

“It could be a turning point for Auckland,” says Skipper. “With prices now at an all-time high, they’re almost out of reach for the average income earner, with first-home buyers the hardest hit.”

He says hot spots in Northland are Waipu, Whangarei Heads, Paihia and Tutukaka.

“Whangarei Heads is the suburb to watch,” he says, with searches for property in the district on realestate.co.nz up 42 per cent on a year ago.

“The message seems to be getting through that with the shortage of listings and the speed with which properties are selling. It’s a sellers’ market.”

Damp Wellington

One in eight houses for sale in the capital is thought to have major maintenance problems with more than half being dangerously damp, according to Dr Nigel Isaacs of Victoria University.

Researchers analysed a random sample of 70 building reports spanning 12 years that were carried out by home inspection firm Buildsure Associates.

Dr Isaacs, a senior lecturer in Victoria’s School of Architecture, says one in eight houses has major maintenance problems that exceed general wear and tear.

Common problems include asbestos, corrosion, timber decay, [faulty] electrics and wall moisture. Isaacs says the problems are commonly seen in stand-alone timber housing.