Why dry homes seem impossible to build in New Zealand

A law change to help make rental homes warmer and drier is a step closer having passed its second reading in Parliament.

The Healthy Homes Guarantee Bill (No. 2) will set the standard for all homes when it comes to heating, ventilation and drainage. But the change is far from becoming law as it is yet to pass a third reading.

The proposed law change is needed, not least for the country’s rental stock (including State-owned rentals). Although landlords  have obligations under the Residential Tenancies Act, there is no specific standard they must meet when it comes to providing tenants with warm, dry accommodation.

The new standards outlined in MP Andrew Little’s bill describe what constitutes adequate methods of heating and insulation, indoor temperature, ventilation, draught stopping, and drainage.

Why we need rules for such things is a mystery, but must reflect the skimpy building standards in New Zealand, and the apparent option for builders to  meet only a percentage of the standard with the blessing of the local council.

Bindi Norwell, CEO at the Real Estate Institute (Reinz) says: “There are significant pockets of New Zealand’s housing stock that are below par by world standards, and any improvement will be of benefit to the health and wellbeing of Kiwis — particularly in relation to respiratory illnesses caused by cold and damp housing, e.g. asthma and rheumatic fever, which can have significant impacts for children and elderly people.”

The World Health Organisation recommends an indoor temperature of 18C to 21C for young, elderly or disabled people and the Healthy Homes Guarantee will outline standards to help ensure optimal temperatures can be achieved.

Norwell says: “Our advice to landlords is not to leave it to the last minute when it comes to installing insulation which is required by mid 2019, as they may struggle to meet the requirements in time — especially if they are looking to use a specialist provider for installation.”

Just by-the-by, I was in the UK last year where thousands of homes are more than 100 years old. Still they are bone dry, warm and healthy to live in. As a nation we know how to build perfectly fine homes — it is not hard. The sooner we see the back of the Bodgit, Leggit and Run brigade, the better.

With the General Election coming up, don’t forget to ask which way your wannabe representative will be voting on the Healthy Homes Guarantee Bill.

New listings drop

Statistics from realestate.co.nz shows that listings of properties for sale across the country fell by almost 18 per cent in July when compared to the same period last year.

In July, 7933 new listings came on to the market across the country, the lowest number in any July month since the organisation’s records began in 2007.

Of the 19 regions across the country, all but one experienced a drop in the number of new listings compared to the previous year. The exception was Nelson, which saw no change to properties for sale.

Realestate.co.nz lists 97 per cent of all residential properties for sale that are listed with estate agents.

While it is too early to say if the market will heat up again come spring, the wider implications of this drop in property for sale are obvious — should the current situation not change. People who would have bought decorating supplies and house-hold goods as a direct result of having moved home will keep their money in their pocket.

Regional prices rise

Andrea Rush of Quotable Value says property values are still rising, but the growth is being driven by sales in regional and provincial centres rather than our largest cities.
When Auckland prices went up the regions took time to catch up, the same may now be happening as prices drop.

Rush says: “Values continue to plateau in Auckland, Hamilton and Christchurch in a trend seen since October last year.

“Wellington and Dunedin are now also experiencing a similar trend with quarterly value growth in both cities slowing to below one percent.”

“Much of the slowdown in the markets is being caused by high prices and banks’ stricter lending criteria meaning it’s difficult for many buyers to raise finance to purchase and this is now constraining the market.

“Record high net migration continues yet building consents are now trending downwards so the underlying demand and lack of supply for homes remains in the market, particularly in Auckland.”

QV’s Auckland valuer James Steele says the city’s property market is still cooling, with sales volumes down more than 30 per cent below the same period last year. He says people are waiting for spring and the election to pass.

Interest rates

Don’t expect the Reserve Bank to increase the official cash rate any time soon. Its 1.75 per cent OCR may hold until at least 2019, say economists at Westpac.

“The banks are being very cautious about lending and this is stifling the market with open homes seeing no visitors and auctions ending with no bids”.

Steve Hart is a business journalist and podcaster.