Education Policy | Post Primary | Preschool | Primary | Tertiary | Search

 


No surprise in unaffordable housing market survey

No surprise in unaffordable housing market survey – UC economics expert

January 23, 2012

The annual Demographia housing survey has confirmed what Christchurch and Auckland residents already knew – that housing has become increasingly unaffordable, a University of Canterbury (UC) economics lecturer said today.

Home affordability in New Zealand cities deteriorated last year according to the international housing affordability survey, with average metropolitan house costing 5.3 times the average income sending them further up the severely unaffordable index.

UC Senior Lecturer Dr Eric Crampton said the survey result was hardly new and the causes were reasonably well understood.

``Economist Arthur Grimes showed in 2010 that Auckland's metropolitan urban limit worked to inflate the price of land within the boundary.

``Further, the Productivity Commission's 2012 report on housing affordability showed rather convincingly that constraints imposed by Councils inflate housing prices. They do so both directly, by hindering increases in supply, and indirectly, by preventing our construction industry from achieving the kinds of economies of scale that help keep construction costs down in other countries. We wind up with housing that costs rather more than it needs to.

``While we are now seeing some new development on the outskirts of Christchurch, city council regulation makes it very difficult for the market to respond after the Canterbury earthquakes substantially reduced the stock of suitable housing.’’

While insurance was a very real constraint on new building, nothing but council regulations prevented other sorts of innovative responses, he said.

UC lecturer Dr John Fountain has earlier argued that council regulations around prevented owners of larger homes from building self-contained flats into those houses, Dr Crampton said.

Striking out a few lines of city council regulation could let homeowners cheaply add a flat into their houses after their children leave home, quickly bringing some needed supply into the market. Instead, the council only allowed it under rules that would have made such construction economically infeasible.

``When a city’s land use regulation is wrong, it’s hard for anything else to be right. And, if a city cannot build upwards or outwards, prices have to rise instead,’’ Dr Crampton said.

``Unfortunately, a city’s home owners often have a strong interest in the kinds of regulations that help ensure ever-increasing house prices but which work to the city’s longer term detriment. Even worse, these regulations can embed fragility into the system so that, when earthquakes happen, the market is forbidden from working to increase supply.

``It was encouraging to read Finance Minister Bill English’s foreword to this year’s Demographia survey. I look forward to seeing this government’s policy response to the Productivity Commission’s report. Fixing land use planning to allow more housing, both by allowing increased density within cities and by allowing our cities to expand, is probably the most important thing this government could achieve before the next election.”

The survey found Auckland as the least affordable market, followed by Christchurch, Tauranga-Western Bay of Plenty, Wellington and Dunedin.

ENDS

© Scoop Media

 
 
 
 
 
Culture Headlines | Health Headlines | Education Headlines

 

Christchurch: Fixing Town Hall Means Performing Arts Precinct Rethink

Christchurch City Council’s decision to spend $127.5 million fixing the Town Hall means not all the land currently designated for the city’s Performing Arts Precinct is required, Canterbury Earthquake Recovery Minister Gerry Brownlee says. More>>

ALSO:

With Hunters & Collectors: The Rolling Stones Announce New Auckland Date

It’s the news New Zealand has been waiting for. The Rolling Stones today confirmed the rescheduled dates and venues for both the Australian and New Zealand legs of their highly anticipated ’14 On Fire’ tour. Now, Frontier Touring is also delighted ... More>>

ALSO:

Flying Things: Conchords, Pretties Help BATS Fly Home

The launch of BATS theatre’s fundraising campaign has taken off – with a bit of help from their friends. And with friends like theirs… An event last night hosted by Te Radar at Wellington’s latest waterfront venue, Shed 6, featured Fly My Pretties and, in a dream-come-true scenario, Flight of the Conchords. More>>

ALSO:

Environment: Zoo’s Own Wētā Workshop Produces Rare Giants For Release

Following unprecedented breeding and rearing success, Auckland Zoo is today releasing 150 of New Zealand’s largest giant wētā, the wētā punga, onto pest-free Motuora Island in the Hauraki Gulf. A further 150 will be released onto Tiritiri Matangi next month. More>>

Girls On Film: Divergent Hits The Big Screen

n January, Catching Fire (the second film in the Hunger Games series) not only became the biggest US box office success of 2013 : it also became the first film starring a female actor (ie. Jennifer Lawrence) to top the annual domestic earnings chart since The Exorcist, 40 years ago. More>>

ALSO:

Wellington.Scoop: No Travel Sanctions For Russian Billionaire’s Superyacht

On the same day that New Zealand announced travel sanctions against selected Russians, a Russian billionaire’s superyacht berthed in Wellington Harbour. More>>

ALSO:

Mental Health: UC Researchers Believe Robots Can Persuade People To Conform

A team of University of Canterbury (UC) researchers and scientists believe robots can persuade people to conform through group pressure... ``Our results showed that robots can induce conformity but to a significantly lesser degree than humans." More>>

NZ On Air: Local Content Holds Steady At 32% Of Television Schedules

Since 1989 NZ On Air has measured local free-to-air television content. The report compares the schedules of the six national free-to-air channels, to observe trends and changes in the local content landscape. More>>

Arts Fest: 2014 New Zealand Festival A Spectacular Celebration

The New Zealand Festival welcomed the world to Wellington over 24 days (21 Feb – 16 Mar) of arts events across the city. “[current figures show] slight increase on the 110,000 tickets issued in 2012. It’s a great result.” More>>

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
Education
Search Scoop  
 
 
Powered by Vodafone
NZ independent news