Grossly Expensive Lots Cause Of NZ Housing Slump
Grossly Expensive Lots / Sections Cause Of New Zealnd Housing Construction Slump – Hugh Pavletich
In March 2007 there were 1077 lots sold for a median price of $172,000 and in March 2008 there were 430 lots sold for a median price of $180,000 (refer REINZ Section / Lot Tables below) – clearly illustrating that the lack of reasonably priced fringe urban lots, is the major reason for the slump in housing construction in New Zealand.
The residential construction sector and the housing sector generally - will not recover until there is sufficient land made available – so that new starter housing on the fringes can be put in place, at prudent development ratios of 20% for the lot and 80% for the actual house construction.
Currently the important development ratios are grossly distorted, as outlined within Scoop: Urban Planning Degrades Housing Productivity, where prospective new home buyers are required to pay excessive pricing for lots.
This irresponsible behaviour by Local Authorities has seriously degraded the pricing and performance of the New Zealand’s residential construction sector as well.
There are only two ways housing can become affordable in New Zealand – either by opening up fringe land supply so that affordable lots can be supplied – OR – by the hugely destructive process of significantly increased migration to Australia.
There are no other options.