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Housing Affordability – An Update

Housing Affordability – An Australian And New Zealand Update


Please find attached a copy of an article from the New Zealand National Business Review March 7 2008issue by Mr Chris Hutchings“Australian move heartens activist”.

Within this article Mr Hutchings explains how I am most impressed with the recent initiatives by Premier Hon John Brumby and his State Government of Victoria, Australia - with Mr Brumby’s announcement at the Official Opening of the Urban Development Institute of Australia (UDIA) Annual National Congress on Tuesday March 4 2007 in Melbourne –being the fast track release of land sufficient for 90,000 residential lots with additional services.

This will no doubt speed up the “Sydney exodus” as outlined within today’s Sydney Morning Herald article “ Talent pool drifts south in search of a dream - Arts - Entertainment” And hopefully spur on other States and New Zealand politicians to act responsibly and “get focused” as well.

Mr Hutchings also outlines the muddled bureaucratic thinking which unfortunately still persists within the New Zealand Government - where they appear keen to repeat the failed experiences of Britainand ignore reality.

“Housing affordability reality” is $140 - $160,000 new starter homes on the urban fringes.

It is hoped the media ask the NZ Housing Minister how her proposals fit within this affordability envelope.

Within the mix of the NZ Governments “loser ideas” is shared equity – where it appears (again from Britain…) the 2003 John Prescott initiative has failed – as explained within this UK Daily Mail article “ £780,000 per property in great first-time buyer flop | This is Money”.

Another bureaucratic nightmare.

Within Mr Hutchings NZ NBR article attached - he outlines the Christchurch City Council’s serious concerns within its submission with respect to the NZ Governments unfortunate “social engineering” initiative – the Affordable Housing Territorial Housing Enabling (AHETA) Bill announced 4 December 2007 – which has attracted widespread criticism (my responses – initial press release here – Open letter to Minister Scoop: Housing Afforability: Open Letter to Minister ).

The intent of this Bill is to force residential developers / builders to supply a certain percentage of lower cost – but by no means affordable – housing on top of grossly inflated priced land. The Christchurch City Council is to be commended for its constructive comments. It is to be hoped that the NZ Government acts responsibly before long – by withdrawing this irresponsible and muddled Bill.

Business leaders then expressed serious concerns regarding the AHETA Bill (video clip accessible OUR YOUNG NEW ZEALANDERS DESERVE AFFORDABLE HOUSING)

Further information with respect to the initiatives at Australian Federal and State level are also covered by me, within a Scoop New Zealand article “Scoop: Housing Affordability: Australia Wins – NZ loses?” of Friday March 7 2008.

I have (finally!) started in to a paper “Getting performance planning in place” which will be an expansion and refinement of my earlier “Open Letter to NZ Housing Minister” referred to above.

As artificially inflated urban market bubbles (created by starving fringe land supply) are bursting around the world – there is now a growing recognition globally – that the “old order” of not recognising the significance and massively destructive consequences of these unnecessary urban asset bubbles - is no longer viable.

I have been particularly scathing of economists and property commentators as outlined within Scoop: Housing Affordability – The Shift To Reality , Scoop: Housing Affordability: Lessons From California? , Scoop: Latest NZ Poll Results A Wake Up Call and Scoop: Poor Analysis, Reporting of Urban Property Bubbles

The great Oscar Wilde is reputed to have said “One should never let ones schooling interfere with ones education”. It would unfortunately appear that we have an oversupply of “schooled” economists and property commentators – and a woeful shortage of “educated” ones who adequately understand specific markets. In fact – sadly, I do not know of one economist - planner - valuer / appraiser in Australiaand New Zealand, with an adequate specialist and educated understanding of structural urban markets.

It is very clear to me that the specialist field of “structural urban economics” needs to evolve as quickly as possible – and as a “non economist” (but never the less a commercial property development practitioner of 30 years – who has observed a few things, got in to countless arguments and read a book or two along the way), I will attempt to “sketch out” important aspects of structural urban economics within the “Getting performance planning in place” paper. This will suggest where the research, training and political focus needs to be – with the objective of restoring housing affordability over a reasonable and realistic time frame within urban markets currently suffering housing stress.

I would welcome comments from readers of this communication – being mindful of the great words of Michelangelo in his twilight years – Ancora Imparo – “I am still learning”. A plaque with this inscription was placed on the writers’ office wall by his children - to remind him no doubt that he doesn’t know as much as he thinks he does.


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