Demand for Auckland houses underestimated by 3000 properties

The Reserve Bank may have been underestimating the number of people moving to New Zealand, and therefore not correctly formulating the effect they are having on housing.

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The Reserve Bank may have been underestimating the number of people moving to New Zealand, and therefore not correctly formulating the effect they are having on housing.
BNZ economist Tony Alexander has been looking through the RBNZ’s Financial Stability report and notes its reference to a net migration gain for Auckland in the year to March 2015 of about 30,000 people.
Alexander quite rightly points to data from Stats NZ which shows a net inflow to Auckland of 31,230 people — Not much different on the face of it. However, he says its ‘not applicable’ category shows a net gain of 15,500 people, of which he estimates 60 per cent would likely have settled in Auckland.
The implication is that the bubble heads at the Reserve Bank underestimated Auckland’s population growth by more than 9000 people — or around 3000 homes.
Alexander says: “Even at the most senior level of housing market analysis in this country, people are still under-estimating the rate of growth in demand for housing stock in Auckland.
“As realisation of this little bit of extra undercounting gets through to the Reserve Bank policymakers, the feeling of a need to get a new tool in place to hammer back down the rate of growth in home lending in our biggest city will grow.”
Meanwhile, National’s Building and Housing Minister Nick Smith says negotiations have concluded on three sites in Auckland for an estimated 740 new homes —  first mentioned in last year’s Budget.  It’s taken a full year just to get the land.
Smith expects the first of these homes to be available in 18 months’ time. It’s a good start, just 19,260 houses to go.
Test for meth
Harcourt’s CEO Chris Kennedy says some home buyers may be skipping an essential step during their due diligence — testing the home for P.
“When it comes to testing for P many buyers assume they can judge whether it has been affected by meth use,” he says. “So-called P houses can be found in any neighbourhood and can look as well cared for as any other house.”
Tell-tale signs of meth contamination can include strange smells, chemical stains around the kitchen sink, laundry tubs and toilets, as well as yellow-stained floors, walls and ceilings. Testing for meth can cost between $100 and $500, says Kennedy.

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Author: Steve Hart

Steve Hart is a business journalist, editor, designer, podcaster and host of the Cool Nights radio show.