More homes in Auckland means more road congestion

While there has been  talk of congestion charging for Auckland’s motorists, it seems the idea will not see the light of day for a 10 years, having been put on the back burner by Transport Minister  Simon Bridges (there is a general election next year after all).

Unfortunately, as more houses and apartments are built across the city, so more cars will appear on our already jam-packed roads and motorways.
Something has to be done to reduce congestion on our roads, and frequent, safe, comfortable and affordable public transport is a big part of the answer.

And when I say ‘safe and comfortable’ I’m referring to bus drivers who routinely accelerate to red lights and stationary traffic and then brake on a dime, throwing passengers around as a result. It can be a real pain in the back.

Lending restrictions bite
The latest round of loan-to-value lending restrictions are starting to impact on real estate prices. They are down 2.2 per cent on last month with Auckland experiencing most of the falls.

However, economists at Westpac say prices are still up almost 12 per cent on a year ago.

They say that “while the fall may look dramatic at first glance, it’s actually a pretty muted market reaction given the impact tighter lending restrictions and tax changes have had in the past”.

While the economists are in a wait and see mode, they write that they haven’t seen anything to change their view that the latest lending restrictions will have an impact on house price growth.

Adding that that historic low interest rates will continue to add fuel to the housing market fire over the next year.

Debt-to-income ratios coming in 2017?
BNZ chief economist Tony Alexander writes that the Reserve Bank will likely introduce a “debt/income regime of credit control/rationing” next year. In plain English this means banks may be restricted by the RBNZ to lending money based on the borrower’s annual income.

I have covered this concept previously — around 18 months ago — after it was introduced in Ireland. Banks there cannot lend more the 3.5 times a borrower’s income — in the UK the figure is 4.5.

If the UK’s lending rules were applied here, a person with an annual income of $70,000 could borrow $315,000 for a home purchase. To buy a home in Auckland currently requires a ratio of around 11 times annual income.

Drone photography
The Real Estate Agent’s Authority is warning estate agents to be aware of the risks when using radio controlled flying drones to video property.

It says  drones should not be flown over other people’s property without permission, and should only be used in daylight and  not pose a hazard to people, property or other aircraft.