Free up the land
July 1st, 2012 at 9:01 am by David FarrarThe HoS reports:
Forty per cent of landlords have increased their rents in the past six months, and many by up to 10 per cent, a survey shows.
The survey, run by Landlords.co.nz and Mike Pero Mortgages, found 26.2 per cent of the 614 investors surveyed who had increased their rent had done so by 6-10 per cent.
Another 42.5 per cent of those who had increased rents had done so by up to 5 per cent.
Sixty per cent had increased rents in the past year. …
He said a supply-and-demand equation was pushing up rents. A shortage of housing stock was prompting competition for rentals, which in turn made rents rise.
The only sustainable solution is to free up more land, increasing supply, which will reduce prices.
Related posts:
- Labour calls for Muldoon rent freeze in Christchurch
- Free up the land
- Auckland rents
- A Christchurch housing idea
July 1st, 2012 at 9:03 am
agree totally but also need to reduce the rma costs
Vote:July 1st, 2012 at 9:28 am
Land is a small part of the problem, also RMA/locl govt costs while a significant cost are not the deal breaker.
Vote:We need to change attitudes to housing and exactly what constitutes a liveable house.
Medium density high rise is a large part of the solution.
July 1st, 2012 at 9:29 am
oh..and lifestyle blocks should be outlawed.
Vote:July 1st, 2012 at 9:30 am
But Bernard Hickey and others says there is too much investment in rental properties, whichbshould be re-directed elsewhere. But people are not going to build or buy a brand new house when they can get an existing house cheaper and it could be a rental which is taken out of rental circulation.
Vote:July 1st, 2012 at 9:32 am
Probably there is enough free land. The actual thing that needs to be done is a mechanism to ensure that approved land is developed. Instead of allowing the land to used for its old purpose (like livestock farming) by the developers. The developers drip feed the available land they do own to keep high prices.
Yes it is shortage of land but only because developers hold back land so they make more money
Vote:July 1st, 2012 at 9:43 am
Will Labour’s policy to have a Capital Gains Tax on Investment Properties help to restrain rent increases.
Vote:July 1st, 2012 at 9:45 am
Freeing up more land is overly simplistic and would not decrease prices to the point where it would be made more cheaply available for everyone. Increasing the supply will only mean cheap land for developers.
To insure cheap land for people you’d need an increased supply of the end product, ie: ready to build sections or houses, not free land.
You could get rid of all the ticket clippers and have council/local government do all the work and sell straight to the public, but I know how well that idea would go down here…
Vote:July 1st, 2012 at 9:45 am
I’m one of the ten percenters, but am actually getting a reduced yield, even without interest costs. As Colville says it’s not just land costs that are the problem but increasing rates (and maintenance) costs, and of course changes to the depreciation rules. Yes I know depreciation was simply a timing thing and I support the change as I suspect many failed to declare depreciation recovered when selling, however it does affect cash flow in the short term. OTOH, there’s no shortage of tenants so one can be quite selective. And BTW, my tenants are generally from ethnic groups that are often criticised, but in my experience the vast majority are genuine, hard working, honest people. Some struggle on low incomes but they generally succeed.
Vote:July 1st, 2012 at 9:55 am
I was told a few years ago that one of the main constraints was large blocks of land on urban fringes being held by developers waiting for land prices to rise sufficiently to ensure large profits from developing their holdings.
Vote:July 1st, 2012 at 9:56 am
By all means free up the land, but 80% of our population increase is from offshore and it hasn’t benefitted the majority of our citizens.
“Among policy and analytical circles in New Zealand there is a pretty high degree of enthusiasm for high levels of immigration. Some of that stems from the insights of literature on increasing returns to scale. Whatever the general global story, the actual productivity track record here in the wake of very strong inward migration is poor. In an Australian context, the Productivity Commission – hardly a hot-bed of xenophobia or populism – concluded that any benefits from migration to Australia were captured by migrants and there were few or no discernible economic benefits to Australians. And that was in a country already rich and successful and with materially higher national saving and domestic investment rates than those in NZ.”
http://www.treasury.govt.nz/downloads/pdfs/mi-jarrett-comm.pdf
Government policies blamed for house prices
Vote:“Immigration and tax breaks for investment in residential property are being cited as the underlying causes of steep increases in the cost of housing over the past decade.
New Zealand now boasts one of the highest rates of home unaffordability in the world as a result of prices rising far faster than incomes, and the government’s Savings Working Group blames that squarely on the policies of successive governments.
Although “the favourable tax treatment of property investment” accounted for about 50% of house price increases between 2001 and 2007, the working group said, there was also strong evidence that rapid swings in immigration brought about price-rise “shocks”.
There was a sharp spike in immigration in 2001, 2002 and 2003 and, said working group committee member Dr Andrew Coleman, it appeared that property prices did not fall anywhere near as greatly when immigration fell again.
The report added that there was little evidence that immigration boosted local incomes. In fact, the need to build roads and schools meant that net migration contributed to the national deficit. ”
http://www.stuff.co.nz/business/money/4622459/Government-policies-blamed-for-house-prices
July 1st, 2012 at 9:58 am
Certainly we need to look at the economic impacts of such matters.
Vote:First, on poorer people, who find so much of their incomes going on rent.Current policies which promote expensive housing is impacting on the living standards of us all.
Higher housing costs also impact on businsess.
I have a reasonably well-paid job, which I would not have accepted had the pay not being so good.
I made it clear at the interview that considering the costs of living in Auckland, the job had to pay well.
I am sure housing costs push up the costs of doing business in Auckland for employers, forcing them to pay more to get the staff than they would otherwise in the provinces.
Thus, cheaper housing would be a boon for businesses.
Current high prices must be a drag on city-based businesses and if they export at all, it will damage the country too.
July 1st, 2012 at 10:04 am
If the increases include the passing on of exorbitant rates increases then they don’t seem at all high.
hj.
Recycling the same old anti-immigration posts again?
The first one doesn’t even address housing, and the second one perversely clains that tax breaks for housing investment leads to increases in costs rather than the decrease that economics would predict. So it’s just rubbish isn’t it.
Did NZ’s population jump sharply last year, which would explain these rent increases?
No, of course it didn’t. So your immigration bashing is again misplaced.
And for the record, it is skilled Chinese, Indian, British and South-Africans keeping the lights on in NZ.
Vote:July 1st, 2012 at 10:06 am
Why is high density housing the answer? I’m sorry but I’m not paying rates through the nose for a ‘livable city’ in a house with no backyard and that’s too small to keep a dog. That’s not ‘livable’, that’s forcing someone to make lifestyle compromises because your town planners don’t know how to plan a town. Create new suburbs, ensure infrastructure is in place before people move in instead of trying to do it years after and stop forcing people to live in shoeboxes just so people who can already catch trains can do so easier, but to hell with everyone else.
Vote:July 1st, 2012 at 10:10 am
I live in a semi-rural area and am surrounded by land that could be subdivided. Aside from market influences, the infrastructure is not available. Landowners several blocks from the services are not going to take the initiative and carry the costs of extending services significant distances. It is not economic.Subdivision costs and council development levies are tough enough as it is.
Vote:July 1st, 2012 at 10:12 am
Developers slam land tax proposal
http://www.stuff.co.nz/southland-times/news/3248188/Developers-slam-land-tax-proposal
IMF recommends to govt to broaden capital gains tax base and introduce a land tax.
“PM says ‘no’
Prime Minister John Key reiterated later a land tax and broader capital gains tax were still off the cards. Asked whether the implementation of one or the other could allow government to reduce income taxes to give people more income to spend, he replied:
“At the risk of repeating myself from last year, we looked at a land tax, and land taxes, one, reduce the value of land in New Zealand, by definition, and it has an impact on every single homeowner in New Zealand.”
“ I wouldn’t have thought we’d want to do that on the back of a very weak housing market at the moment,” Key said at his Monday media briefing in the Beehive.
“Capital gains tax is already in place. They don’t produce you a lot of revenue upfront, so they wouldn’t actually pay for the Christchurch earthquake in day one, and in our view they are an inefficient form of taxation,” he said.
http://www.interest.co.nz/news/52737/imf-recommends-govt-broaden-capital-gains-tax-base-and-introduce-land-tax-your-view
Vote:July 1st, 2012 at 10:14 am
Landlords always enter these discussions saying things like “oh freeing up land is overly simplistic”. Of course it’s not the complete solution but it’s criminal that it isn’t being done in line with population growth. The red tape is also a joke. It’s a work scheme for yet more state box tickers. And where were all those box tickers and building inspectors when those bloody leaky houses were being thrown up? It’s a rort. The other line that really gets on my tits is this “we need to learn to like living in fucking shoe boxes in the CBD”. Fuck off. Why the fuck should this generation of kiwis be excluded from living like their parents and grandparents did? Growing your own veges and mowing the lawn on the weekend is a fundamental part of kiwi life. Having a garage where you can work on your motorbike or car or bang nails into a piece of wood is mandatory. There is plenty of land in NZ so fucking free it up. House prices have skyrocketed in the last decade and it’s been a deliberate manipulation of the supply to create the wealth effect and stimulate a consumption based economy (fueled by suppressed interest rates). Rates based on council valuations is a part of it too.
One thing I can’t understand is why oh why the greens harp on about higher density. Yeah I know they hate commuters and roads etc but it’s their voter base who suffer (younger voters if you are wondering) by living in these artificial environments surrounded by the piss ugliest buildings in the world. Auckland CBD is a shit hole. Who on earth would want to live there?
Steps need to be taken to increase the supply of decent sized houses so this generation of young kiwis, who want to have a family and live like kiwis always have, can. Immediately. Or else.
Vote:July 1st, 2012 at 10:14 am
Colville: oh..and lifestyle blocks should be outlawed.
I have a lifestyle block of sorts.
Vote:a) I should be allowed to have one if I choose.
b) It comprises two separate blocks on two titles but local zoning will not allow me to sell one block as anything other than “farmland” – it’s about 1.5 hectares.
July 1st, 2012 at 10:17 am
This is what tenants are paying for and government policy is managed on the investors behalf:
“Listen, folks, you’re here to learn why you’re poor!” an ebullient Dolf de Roos tells a packed audience of 500 well-heeled people – including an 11-year-old boy writing down every word – at the Sheraton ballroom for his $79 a head Real Estate Riches seminar last week.
“The deal of the decade comes along once a week!” says de Roos. “If you believe that, you will find deal after deal after deal.” But you will only amass money, he says, when you come from an abundance consciousness instead of a poverty consciousness; when you tell yourself, “I am a magnet for money!”
Tonight, a pumped de Roos tells his audience that he wants people to invest in property and write to him 12 months down the track and tell him they’ve “made one million or three million, or you’ve got 16 properties, or we’re taking six months off because our cash flow now exceeds our outflow!” He says, “I don’t know any other activity where the rewards are so huge. If you want to invest a million dollars in the sharemarket, you need a million dollars. If you want to invest a million in real estate, you only need $100,000.”
You can buy one property, get it revalued, use the equity to buy another property and then buy another and another. “And you do it all with OPM. Other people’s money. OPM. It’s like being high on drugs!” What’s more, the wonder of depreciation claims on the building and contents means “the government subsidises your investment! It’s delightful!”
Vote:http://www.listener.co.nz/uncategorized/house-of-the-rising-sum/
July 1st, 2012 at 10:19 am
dod eat dog. Highrise housing where 1000 people can live on a 5000 m2 avoids greenfields development and all the roading and other BS that goes with it. We (NZ) just needs to mature in its thinking before all our farmland is gone under ashphalt.
Vote:Not everone needs a backyard or has a dog or a kid to run around on the grass. A prof couple working in the city, why shouldnt they walk to work rather than both drive seperate cars 30 mins each way?
July 1st, 2012 at 10:25 am
PG, I live on one too
Vote:However I am a developer and I know the damage that is done by bringing them to market. Lifestyle development is always on the fringe of a city so that when a city wants to redevelop a tract of land its under multi owners and very hard to manage from a planning POV. You only need one sticky owner to screw up a good plan if you need to put a road thru to bring a block to market.
July 1st, 2012 at 10:31 am
Even when you get the land, you have to survey it up into sections or blocks. It takes 1-2 years and nearly half the cost is the council clipping the ticket doing nothing. The process is a joke. If a private business was run like this, it wouldn’t exist.
Vote:As the GFC continues, more and more immigrants are going to arrive here looking for housing, the problem is only going to get worse.
July 1st, 2012 at 10:38 am
wat dabney (1,594) Says:
Recycling the same old anti-immigration posts again?
The first one doesn’t even address housing
———————–
but it does address population increase and associated need for infrastructure…does that help you with it?
=======================
“the second one perversely clains that tax breaks for housing investment leads to increases in costs rather than the decrease that economics would predict. So it’s just rubbish isn’t it.
———–
“I am a bit tied down at present (which should be obvious by my lack of response to comments). However, I just had to pop around to say that I approve of the team for the savings working group – bunch of great thinkers that will look at the issue objectively, and come up with some genuinely useful solutions/analysis.
Looking forward to their reports.”
Vote:http://www.tvhe.co.nz/2010/08/24/savings-working-group/
July 1st, 2012 at 10:57 am
Roads are made, streets are made, services are improved, electric light turns night
Vote:into day, water is brought from reservoirs a hundred miles off in the mountains —
and all the while the landlord sits still. Every one of those improvements is effected
by the labour and cost of other people and the taxpayers. To not one of those
improvements does the land monopolist, as a land monopolist, contribute, and yet by
every one of them the value of his land is enhanced. He renders no service to the
community, he contributes nothing to the general welfare, he contributes nothing to
the process from which his own enrichment is derived. (Winston Churchill, 1909,
quoted by Barker 2003,
http://www.nuffield.ox.ac.uk/politics/papers/…/McLean%20Land%20tax.p...
July 1st, 2012 at 11:06 am
hj,
“but it does address population increase and associated need for infrastructure…does that help you with it?”
Not really. The original article deals with recent rent increases of up to 10%. Clearly there hasn’t been a 10% jump in population over the last 6 months, so your response explains nothing. We are left pondering why rents have increased as they have.
Vote:July 1st, 2012 at 11:13 am
Wat Dabney Says:
And for the record, it is skilled Chinese, Indian, British and South-Africans keeping the lights on in NZ.
Vote:…………
Geez what, where are our Kiwi electricians?
8/10 of the top real estate agents are Asian.
July 1st, 2012 at 11:24 am
All this talk about the problem being “developers” landbanking is complete crap. There is so much land it isn’t funny. And there is a paucity of developers around. Simple maths says a small amount of developers cannot affect the vast amount of land available. The same applied when there was a plethora of mortgagee sales. The Herald and other news outlets had front page headlines that mortgagee sales would affect house valuations. Well that was complete crap also. The number of mortgagee sales as a % to the number of houses is so small it could not possibly have an impact on house prices. And now prices in Auckland are rising. If you want house prices to fall, and rents also, the solution is very simple. Either stop people coming to your city (reduce demand) or increase supply of housing by making more land available and reducing RMA costs.
Vote:July 1st, 2012 at 11:24 am
watdabney:
The original article deals with recent rent increases of up to 10%. Clearly there hasn’t been a 10% jump in population over the last 6 months, so your response explains nothing. We are left pondering why rents have increased as they have.
——-
Vote:while we have to keep building infrastructure for population growth (funded by taxes from a low paid workforce) older infrastructure get neglected.
there is also the earthquake and nation wide insurance premium rises.
July 1st, 2012 at 11:38 am
hj,
I don’t think there has been a sudden immigrant-fuelled surge in the NZ population size over the last 6 months, so we can conclude you are barking up the wrong tree.
The original article has 42.5% of landlords increasing rents by up to 5%, which doesn’t seem at all excessive or even of much interest.
Another 26.2% increased rents by up to 10%, which is significant. But without further information we don’t know if, for example, the bulk of this was in battered Christchurch.
In fact, of greatest interest is the line which says ‘Sixty per cent had increased rents in the past year.’ The real question is why haven’t the other 40% increased theirs.
Vote:July 1st, 2012 at 11:38 am
Of course this hasn’t anything to do with rent increases….
http://tvnz.co.nz/national-news/aucklanders-face-big-increases-in-rates-4896030
Len wants your money!
To keep unprofitable assetts such as POA, Keeping his mates (The unions and Labour) happy.
Vote:To have his trainset, keeping his mates (Labour and the Greens) happy.
To hand out ‘free’ goodies (Free swimming, festivals…) to buy his South Auckland voters.
To pay for an ‘inclusive’ council (Racial based seats) and lots of bureaucrats.
To pay for his glossy brochures, patting himself on the back.
July 1st, 2012 at 11:53 am
Don’t look at population growth (80% net from offshore).
Vote:Don’t look at resource constraints.
Don’t look at environmental constraints
Don’t look at profiteering.
Look at socialists in councils.
July 1st, 2012 at 11:54 am
At long last and long may it continue.
If you can’t afford the rent then buy your own.
Cant afford to buy your own its because you haven’t saved enough money (and 10%) will get you there or you don’t earn enough money. Either upskill or do what lots of us have done, work harder for longer, stop wasting what you do earn and set a bloody goal to own yourself a house. Millions do it all the time.
Its not what you earn its what you get to keep.
Stop complaing and whinging, change your “broke attitude” and get on with it.
Think about where you need to live as opposed to want to live.
I can find you relatively cheap houses in nice provincial towns that you can afford.
Living in Auckland is the pits, always. Why do you do it?
My forebears who came to this country faced the same hurdles, as did yours. Get offa your lazy arses and do something.
Currently you can buy close to the beach sections in Papamoa for half what they used to be. Like one of those.
Vote:July 1st, 2012 at 11:56 am
people complain about council charges but who isn’t cheap these days eg dentists optometrists, lawyers, architects.
Vote:July 1st, 2012 at 12:02 pm
Why? This is a free country and, if available, you should be able to buy whatever land you want.
Vote:July 1st, 2012 at 12:13 pm
My forevears who came to this copuntry faced the same hurdles as did yours. Get offa your lazy arses and do something.
…..
I think that is the point. We now have a much more interconnected world and hence competition for land. The property market is exposed to the wealthy proportion of a very large population. In the past it was locals against locals, now it is locals against Harcourt’s Shanghai etc.
Once Redcliffs was an unprepossessing fishing village, distinguished by a collection of modest fishermen’s cottages. Most have now dissapeared, replaced by more luxurious residences, and property values have escalated.
“It’s a standing joke that we’re being taken over by the Americans and British, who have taken advantage of the stronger property markets in their own countires and favourable exchange rates”
“I know an English couple who have summer here and go back to England in the winter”
“What other parts of the city have such nice walks?…..
So Bullshit to that Viking2
Vote:July 1st, 2012 at 12:15 pm
Nick K at 11.24. You have no idea what your talking about. Landbanking (and supply control)is the way large scale developers make money. Buy a farm on town edge and wait for town to come to you. You need great cashflow but will get a vast return. This is why so many of the big guys started with either Dads or Granddads money.
Vote:July 1st, 2012 at 12:19 pm
Manolo. No its not a free country. Read your District plan. Lots and lots of rules designed to try and make your capital city a happy and safe place to live. If you want a lifestyle block buy 40 600M2 sectons side by side to run your 3 alpacas
Vote:July 1st, 2012 at 12:27 pm
Colville, and you have no idea what an apostrophe is.
Apart from LandCo (now owned by Todd Corporation), name another “large scale developer”. My point is there isn’t enough of them to control the supply of land, because there is far more land than there are “large scale developers” landbanking. Perron – insolvent/bankrupt. McKenna – bankrupt. Henderson – insolvent/bankrupt. Krukzeiner – bankrupt. Don Ha – bankrupt. Peters – bankrupt. The list is endless. The reason we have a housing crisis in Auckland is because there are no large scale developers around any more.
Vote:July 1st, 2012 at 12:30 pm
“oh..and lifestyle blocks should be outlawed.”
It’s very confusing: we’ve got Pol Pot forcing us out of the cities and into the countryside, and Colville herding us all back in.
But what they both agree on is that they have the right to tell us where to live.
Vote:July 1st, 2012 at 12:36 pm
From investopedia:
Globalization brings reorganization at the international, national and sub-national levels. Specifically, it brings the reorganization of production, international trade and the integration of financial markets. This affects capitalist economic and social relations, via multilateralism and microeconomic phenomena, such as business competitiveness, at the global level. The transformation of production systems affects the class structure, the labor process, the application of technology and the structure and organization of capital. Globalization is now seen as marginalizing the less educated and low-skilled workers. Business expansion will no longer automatically imply increased employment. Additionally, it can cause high remuneration of capital, due to its higher mobility compared to labor.
Vote:………
“less educated and low skilled” includes anyone who has difficulty getting a job or has been made redundant. Combining lower pay for this group with private property traded with the worlds wealthy is a double whammy.
July 1st, 2012 at 12:40 pm
wat dabney
But what they both agree on is that they have the right to tell us where to live.
…………
my freedom starts where yours ends.
i.e people were against allowing more building on the Port Hills (Chch) as they loved the smooth tussock.
Vote:July 1st, 2012 at 12:43 pm
DPF is in favour of a land tax (I recall).
Vote:July 1st, 2012 at 12:45 pm
hj,
“‘less educated and low skilled’ includes anyone who has difficulty getting a job or has been made redundant. ”
Eh? An experienced, senior IT person who is made redundant is classed by you as ‘less educated and low skilled’?
weird
Vote:July 1st, 2012 at 12:48 pm
Nick K. How many sections a year make a large scale developer in your eyes? I would think that someone who can bring a few hundred sections to the market a year would be considered large scale, and there are probably 100 of them alive and kicking.
Close to where I live there is a farm just starting to get cut up into residential. 79 Ha. Purchased for $800K about 20 years ago. It has a stream and some bush that will cut the yeild on it but its around 700 sections. Its close to $200 mil retail.
I have spent the morning trawling thru sales stats in dannemora/flatbush for a mate I am pretty sure the crowd that did that rather massive development is still around and working.
Vote:July 1st, 2012 at 1:01 pm
My lifestyle block is 40km from the nearest dairy, and further from the nearest “city”.
Vote:July 1st, 2012 at 1:30 pm
Colville you are right. I spent the last 40 years as a surveyor and planner creating large scale subdivisions. Most of the developers mentioned by Nick K developed buildings, commercial developments or intensive residential. Most of my ex clients are still there and developing.
As to the quote hj sets out from Churchill times have changed. Now days Councils place a levy on subdivisions and residential developments which are set out in their annual plans. Levies to cover the cost of maintaining the wider area roads, to cover the cost of the trunk water mains and sewers, libraries and many other Council services. The levies also endeavour to cover the monies that other ratepayers have contributed through their past rates so that new sections in subdivisions and units in high rise developments can be deemed to have contributed to the cost of all of the existing services. There are reserve contributions that seek to provide for the purchase and development of local reserves. These levies are in many cases astronomical and greatly inflate the cost sections and dwellings.
No wonder the cost of sections is so high as they have to include all of these costs.
Vote:July 1st, 2012 at 1:37 pm
http://www.stuff.co.nz/business/industries/7201314/No-joy-in-housing-market
Not enough houses comming to market, surprise surpise.
Vote:Developers lag behind demand by at least a year and more like 2 which is why when demand falls they can be left badly exposed.
July 1st, 2012 at 1:40 pm
July 1st, 2012 at 12:45 pm
hj,
“‘less educated and low skilled’ includes anyone who has difficulty getting a job or has been made redundant. ”
Eh? An experienced, senior IT person who is made redundant is classed by you as ‘less educated and low skilled’?
………
I know someone who had a good job a “network engineer” but after going private was outdone by younger people recently trained. Perhaps it got more technical and harder. Since loosing that job she has been doing anything she can. What she hasn’t done is retrain into a well paying job, maybe she could have or maybe at her age it was getting a bit late.
Vote:July 1st, 2012 at 1:48 pm
Colville
Some developers take upto 3 years from concept to selling as Councils throw the book at them and delay. For example the developer that was paying high interest on all of the development costs. Council told him that all that he needed to do to get the final sign off certificate was to pay their final fee but they could not tell him how much as the person who calculates it was on leave. He offered to pay twice – three times their estimate as a bond against their fee but NO they had to wait three weeks for the staff member to return.. Work that out at over ten percent on over $10m for the month and then wonder why cost of sections is so high.
Vote:July 1st, 2012 at 1:52 pm
Landlords asking $1000 a week for modest Christchurch houses are being accused of price-gouging, and doubled rents have been labelled obscene.
Vote:http://www.stuff.co.nz/the-press/news/7190199/Rental-rises-called-obscene
July 1st, 2012 at 1:59 pm
Boglio
Vote:Recently on one of mine a council engineer asked for a veichle crossing to be put as a condition of cutting out a block of land for 8 sites, rather than argue (it will need to be ripped up again because the berm will get destroyed) I went ahead and had it put in as it was time effective. After it was done he “requested” that the berm be “cleaned up” before he would sign off so i went and did that then after taking a few weeks to inspect he says that he will wait for evidence that the grass on the berm was growing before he would sign off. 4 months wasted.
July 1st, 2012 at 2:01 pm
Right, so your argument Colville is that about .002% population (some “large scale developers” – your words, not mine so you define it please) control 100% of available land. It’s crap. The examples above are bureaucracy problems, not landbanking ones. It’s zoning and restrictive council rules that kill development, not “greedy” developers.
Vote:July 1st, 2012 at 2:44 pm
Because Councils only review their District Plans at 10 year intervals they tend to zone sufficient land for 10 years. Developers then buy sufficient land for them to stay in business for that time and only release sections in accordance with their financial time table.
Once they have tied up the land for their purposes there is no more for others to purchase and develop. Look at Danemora and East Tamaki where there were essentially two or three developers over a 15 year period. Development proceeded at the developers pace. In west Papakura there are two developers who own the land and are proceeding at their pace.
Vote:July 1st, 2012 at 3:03 pm
Yes, and that’s a council/zoning/RMA issue. The key words you used were “sufficient land”.
Vote:July 1st, 2012 at 3:16 pm
Nick K. You seem to have lost sight of your original argument.
Vote:You said that all the large developers had gone bust I said no.
In the modest city that I live a couple (maybe 4 guys? and another couple that are inactive at the mo) do all the “large scale” development” so they control pricing. They are sensible and dont war on price. Sure there are a fair few that work around the fringes doing smaller stuff but they (I inc) cant/wont affect pricing
I have spents hundreds of hours searching for land to buy in the right places but I always end up finding that key pieces or large parcels are already owned by a certian group of guys.
Certianly one large developer here has gone pop but that is because they brought up half of Kinloch in a rather odd fashion.
July 1st, 2012 at 3:33 pm
The Council required Development Contributions are definitely a burden on developers. Council defines anyone who subdivides as a developer regardless of scale. Helping a family member by subdividing family land is now beyond some families. Council’s spending of Development Contributions on things other than development and infrastructure is a problem in some areas.
Vote:Councils continue to use Engineering Codes to set new rules outside of the scrutiny of the RMA. By placing increasingly onerous and in some cases unnecessary Engineering requirements on Developers they are raising Development Costs. Councils are making less decisions in house and requiring Developers to find someone else to sign off on some obvious and basic things. They run for cover before making any decisions that might reflect on them all the while charging for their service at exorbitant rates. Developers create new ratepayers forever for Councils at no cost to Council …….. now that is a good business model.
However an even better business model is the one used by Land Information New Zealand who on the basis of there being less subdivision plans going through doubled there fees (another cost for developers) so as to cover their costs. Now they are finding that they have a backlog so their processing is well out beyond the 10 day target (again more cost for Developers as they wait for titles).
LINZ with their Digital Landonline product did initially reduce plan examination fees however in reality with new regulations, that largely flew under the public radar, by making more work for surveyors who lodge the plans they effectively increased survey plan costs for Developers by moving costs elsewhere. LINZ are currently reviewing the Rules for Cadastral Survey again and asking for submissions, not that anyone would know.
There are too many Councils each with their own Plans and Engineering Codes, each one spending huge amounts of cash reinventing the same wheel over and over again. One basic plan for the whole country with local variations based on specific templates could not be worse than what we have now. Why is a 350m² minimum section size OK in one place but you need 450m² somewhere else.
July 1st, 2012 at 3:42 pm
“At a Bank-Treasury sponsored forum in 2007, a senior planning official noted that most of the residentialzoned
land around greater Wellington was owned by 4 groups, who tightly managed the release of land. The regulatory environment (capital value rating and limitations on the unwillingness of councils to zone new land for residential purposes) meant that the owners of that land appeared to be acting quite rationally to maximize their expected returns, given the quasi-monopoly right laws had granted them – at the cost of artificially high section prices. In its first report, the 2025 Taskforce touched on these issues, and recommended that:
When determining the zoning of land for residential purposes, local authorities should be required by statute to take explicit account of any differences between the price of residential-zoned undeveloped land and the price of other undeveloped land in similar areas. These differences should be reported on by local authorities each year, with a strong presumption that scarcity of zoned land, as reflected primarily in price differences, should prompt action to increase the supply of residential land (recommendation 27).
Vote:These things matter much less in advanced countries with fairly static populations (and there are increasing numbers of them). But if we are going to continue to run, as a matter of policy, one of the fastest rates of population growth, and still try to close the yawning income gaps, we need to have policy regimes that are fit for purpose.”
http://www.treasury.govt.nz/downloads/pdfs/mi-jarrett-comm.pdf
July 1st, 2012 at 4:23 pm
hj#
“….“less educated and low skilled” includes anyone who has difficulty getting a job or has been made redundant. Combining lower pay for this group with private property traded with the worlds wealthy is a double whammy….”
It’s moreso created by allowing ‘mass low-skilled immigrants’ -then- leading on to ‘difficulty getting a job’ for others.As Wat says – “a senior IT worker is low-skilled” ? Hardly, the government instead let’s in Indian IT workers who dampen demand, but when work dries up, the senior it worker who is probably on higher rates of pay compared to his indian work mates, is then made redundant.
Businesses don’t employ 50 accountants, and then half the pay rate because they ony need 25.Pay rates are decided BEFORE someone is employed.
Likewise, degree and trade qualified immigrants look for jobs in their fields, and if a country is not paying what the ‘prospective’ immigrant thinks is worthwhile, then they look elsewhere. While low skilled immigrants look for any job – anywhere.Allowing them into the country to do so, creates problems.
Globalization, in other words arrivals/departures, is an imbalance in the local supply/demand labour equation ONLY if the government is STUPID enough to let it become an imbalance.
We ALLOW in low skilled workers because we NEED low skilled workers – but that doesn’t then mean that there is a DEMAND for them in NZ – the pay rates leading to the poverty rates of NZ’s low skilled tell us there is currently no demand! But still the government lets them in.
Yet, unbelievably, the low skilled can be on high rates of pay – look no further than the public servants who created the immigration policy.Look also at those public servants who are ‘thinking’ that they are ‘helping to eleviate poverty’.
Well, they really aren’t doing anything of any worth that employers in the private sector would pay them for.Which also means that ‘low-skilled’ can also be people who are degree qualified.Look at the low rates of pay that some ‘qualified’ people are on.
The private sector ONLY fixes the problem by employing those in poverty on higher rates of pay by increasing productivity etc per worker, or having a worker who is more qualified leading to more productivity etc, or educating that worker further to increase productivity etc.
If immigartion of the low-skilled stopped tomorrow -it is as sure as the sun rises- that employers would DEMAND that workers increased productivity per person – leading to better pay for all.
Which shows that we don’t need the public servants on high rates of pay who are REALLY AND ONLY ‘pretending’ to fix the problems of poverty, or created by poverty.Business and employees need lower taxes – these public servants can instead become ‘global workers’ and just ‘fuck-off’.
Vote:July 1st, 2012 at 5:36 pm
Stop whining and start earning becuase it’s all about to move upwards.
Monday’s Commerce Department report on new home sales said Americans bought new homes in May at the fastest pace in more than two years – up 7.6 percent compared with the month before.
By Richard Davies
Jun 26, 2012 9:58am
Home Prices Rise in Nearly All Cities
The trend is now clear. The worst of the housing slump is over in many parts of the country.
This morning’s Standard & Poor’s/Case-Shiller index reports home prices rose in nearly all major U.S. cities in April from March. The average increase in the 20 cities tracked was 1.3 percent – the first rise in seven months . San Francisco, Washington and Phoenix posted the biggest increases. Prices fell 3.6 percent in Detroit, the only city to record a drop.
The increases partly reflect the impact of the spring buying season. The month-to-month prices aren’t adjusted for seasonal factors. Still, prices in half of the cities are up over the past 12 months. The largest gain was in Phoenix, where prices rose 8.6 percent compared to last year.
Vote:http://abcnews.go.com/blogs/business/2012/06/home-prices-rise-in-nearly-all-cities/
July 1st, 2012 at 5:40 pm
V2, a healthy realestate market (if it happens) will save Obama come November.
Vote:July 1st, 2012 at 7:39 pm
How many times do I have to say that landlords never do anything to ease housing shortages (or create them for that matter). Landlords typically buy existing houses, which has absolutely no effect on the supply of houses. Landlords getting out of the business also has zero effect on the supply of houses – when they sell up, either another landlord buys the house or an owner-occupier does – either way there is no change to the supply of houses!
To increase the supply of housing we need more people building new houses. It doesn’t really matter what type of housing because the market adjusts down the line. You don’t need people building so called affordable housing to make a difference to the housing market.
Vote:July 1st, 2012 at 7:57 pm
Well you the taxpayer are busily building new HNZ houses. In Tauranga anyway.
Vote:July 1st, 2012 at 8:24 pm
Colville, I thought it was obvious by now, but maybe not.
“Large scale” developers do not control pricing at all because it is councils which control the supply of land. Councils control the supply of all land.
Vote:July 1st, 2012 at 10:54 pm
Free up land? Won’t anyone think of the disgruntled taniwha and the inconvenienced snails?
Vote:July 2nd, 2012 at 9:16 am
Nick K.
Vote:No have no fucking idea do you.
How many Councils enter the market and buy/rezone/develop/subdivide/sell down land?
Developers control pricing because they stage works to chase the market not lead the market.
Councils are not the only ones to rezone land you know. Private plan changes happen all the time.