The Press editorial on housing

March 1st, 2013 at 2:00 pm by David Farrar


Getting a clear and accurate picture of the housing market in Christchurch since the earthquakes is not easy.

Anecdotal accounts of a shortage of houses available to rent or buy and of rocketing prices abound, but there have been few hard figures about the wider reality.

The problem with this is that alarmist talk risks generating its own reality and will certainly spread unnecessary despondency.

That would be a pity for an investigation, published by The Press this week, shows that in fact, while the housing market in Christchurch has become more competitive and rents and prices have risen affecting low-income families in particular, talk of a general “housing crisis” is not borne out. …

The suggestion by some that a few desperate cases of hardship represented a wider crisis was not accurate.

The best way to help with the rental challenges is to get more houses built.

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5 Responses to “The Press editorial on housing”

  1. s.russell (1,486 comments) says:

    I suspect many of the alarmists have failed to correlate that fewer houses available may match a sharply reduced population. Among many items of evidence of the later are the reduced school rolls which have prompted the school closures and mergers.

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  2. Viking2 (10,703 comments) says:

    BNZ chief economist Tony Alexander predicts the latest housing upturn will go on for another three years; says Auckland prices up 27% from 2009
    Posted in Property March 1, 2013 – 09:59am, David Hargreaves

    The upturn in house prices “has only just started” and will probably go on for another three years yet, BNZ chief economist Tony Alexander says.

    He says in his “weekly overview” that examination of Real Estate Institute of New Zealand data shows that Auckland house prices are already up 27% from the low point in 2009 in the wake of the global financial crisis.

    Just behind Auckland is Christchurch with a 23% gain and the capital Wellington, with just an 11% rise. Across the whole country prices are up 16% during the same period.

    by bigblue | 01 Mar 13, 10:17am

    There was at least a 50% chinese crowd at Barfoots North Shore auction rooms this week and they were the successful bidders on many of the properties. The chinese were also out in force at yesterdays Bayleys auctions:

    So mut a loy of sympathy for the cause of housing going under.

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  3. Viking2 (10,703 comments) says:

    Viking2 (8,916) Says:
    March 1st, 2013 at 6:31 am

    Property market at risk of ‘sharp correction’
    Last updated 05:00 01/03/2013

    Financial ratings agency Standard & Poor’s says there is a significant risk of a property crash in New Zealand.

    S&P, which has come in for criticism over its failures to adequately assess risk on many investments in the run-up to the Global Financial Crisis, said its “base case scenario” was for medium-term real estate prices continuing to stabilise at current levels.

    But credit analyst Nico DeLange said: “We are of the opinion that a significant risk remains of a sharp correction in property prices occurring given the uncertain short-to medium term outlook for the global economy.”

    Such an event would have a flow-on impact on the ratings of New Zealand’s banks. DeLange said: “This could potentially lead to a build-up of economic risks, resulting in the lowering of the economic risk score of New Zealand to ‘4′ from ‘3′. Such a change could have a direct impact on the stand-alone credit profile of New Zealand banks, and the issuer credit ratings of banks in New Zealand.”

    Yesterday Finance Minister Bill English indicated new rules that could take some of the heat out of housing market could be in place by mid-year.
    So it looks like the Poor Standard moiney rating spruikers whoi didn’t predict the GFC are now running around without any basis of fact and trying to kill the property market.
    These useless pricks should be told to take their ratings and stick them up their own arse.

    Worse is that stupid bloody English is running around along with Wheeler trying to manage the market. Doomed to failure.
    No one with any brain power would take any cognisance of these poor standards. Smart people do their own search these days and can form their own opinions.
    I supose the long suffering taxpayer is also paying for this useless non factual emotional advice.

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  4. hj (5,677 comments) says:

    “The suggestion by some that a few desperate cases of hardship represented a wider crisis was not accurate. The Government has always insisted this was the case but has so far been unwilling to release detailed results of its own surveys of the situation. There is no reason why it should not do so. ”

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  5. pq (728 comments) says:

    I don’t really think we can say [ quote Farrar]
    “Well done to The Press [ Christchurch] for doing a comprehensive investigation and going beyond the headlines.”
    They Press are only about twelve months behind what everyone down here already knew, and it was the Press that carried all the idiotic sob stories. I did my own investigation about this time last year. Apart from following local availability , reviews of Trade me rentals showed there were hundreds of accommodations.
    I gave up trying to rent out my nice three bedroom home for $400 before I went overseas and opted instead for short term rentals to earthquake refugees. Even though these people were not paying a dime for the accommodation , [ Insurance paid] their demands and whimsy were quite intriguing. Many of them told me they had plenty of choice.
    What is lacking is the the four bedroom home at $250 per week. Well golly gee, what do you know, and that’s what all the sad stories in the Press were about . Four children two dogs two cars, many friends Wanted nice home in good area at $250 or less.
    Eric Crampton had a look at it and found the same
    A guide to the rip off landlord in Christchurch.
    Assuming rental to earthquake refugees, three bedroom home, nice place , animals allowed, best quality firewood provided . Remember that the property supervisor has to juggle all sort of peoples calendars and guide people in and out and attend to them. The rental down time is about 35 to 40% because it is difficult to capture clients who do not overlap. Most were only in the house two weeks or so. The Insurers paid us about $800 per week . Taking out down time the return was about $500 per week.
    In reflection it would be better to have a client worth $400 and not have to supply electricity, internet , and wood, and the risk, but this was the price I had to pay to be able to get back into the house when we came back home from Bangkok .
    Most of the costs below would be there whether tenanted or not, but I just list them here from the journal ledger so we can get real about the rip off landlord
    Costs per month
    Rates = $120, // Insurance = $95 // Internet Telstra Clear = $110 // Repairs and Maintenance general = $40 // Property supervisor attending to maintenance and tenant requirements = $150 // Power and logburner wood in Winter =$220 [ yes they will keep the place at 25degrees ] and that heatpump will be on 24 hours
    That’s about 25% of the total income per month . Don’t believe me send for my journal ledger. And as I said above, unless you give them good things they will find them elsewhere, massive rental crisis. Maximum net return available for one year =$18,000 // asset value = $400,000
    Return = 4.5%

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