The conundrum of the current housing crisis remains the hot topic at gatherings of kiwis throughout the land.
It’s a problem that’s making the nation’s best brains overheat as solutions are sought.
Basically, it comes down to the age-old issue of “supply and demand”: There are too many buyers chasing too few houses on sale.
Politicians and Reserve Bank officials can no doubt come up with a range of levers ranging from the subtle to the draconian but none are likely to make a substantial difference until we can build our way out of the problem. The bad news is that will take years.
Christchurch is a text-book example of how it works. In the wake of the 2010/11 quakes a mammoth effort was put in to identifying land suitable for new housing and for focussing the construction industry on new builds as well as rebuilds. Now, close to a decade on, Christchurch has sufficient housing stock with selling prices significantly below other major urban centres.
Here in Wellington it’s sad to hear the children of friends and family say they either won’t consider coming to Wellington to work and live because of the unaffordable housing prices or if they are here they will have to move away just to get a first foot on the property ladder.
One of my pet peeves at the moment in greater Wellington is the use of closed tenders and its impact on ratcheting up the price of sales. A few years ago there would be mere thousands of dollars between the top and the bottom bids. Nowadays, the difference between the top bid and the second highest bid can be a hundred thousand or more. Three-bedroom, one bathroom houses in good nick in a mid-range suburb can fetch north of $900K.
With auctions, it’s a fair and transparent contest between buyers. The difference between winning and losing may only be ten thousand dollars. With closed tenders it’s a guessing game and those with the deepest pockets and fiercest determination to go high always win. The biggest winner beside the property owner is the real estate agent who encourages this selling approach.
Is it time to ban closed tenders/deadline sales because of the way they put a Bunsen burner on prices? Maybe. It might help stem some of the rocketing prices in some parts of the country but it would not be a cure-all by any means.
On the subject of housing the only two sure things are that it will take years to sort out and that politicians will still be arguing about it at the 2023 general election….