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Hugh Pavletich - Re: (Housing) Action Desperately Needed


Dear David,

Well done with your important opinion in The Press this morning on A17. I do hope it appears on the e-edition at some stage, with that wonderful graph.

Strangling Christchurch land supply only means we are sprawling all over the Canterbury Plains of course, with what one could term “ultra-low density urban development” (lifestyle blocks and outlying towns).

The unnecessary disruption costs are enormous.

Landcare Research early last year found there had been an explosion of lifestyle blocks nationally 13 years prior from 100,000 units to 175,000 units consuming 8,700 square kilometres of our land area, in contrast to about 1,800 square kilometres for our urban areas … Tony Chaston of Interest Co NZ reported early last year …

Issues on both sides of the fence on lifestyle land |

I commented recently as well …

Christchurch Council Irresponsible On Housing Issue | Scoop News

… and where the focus must be …

Focus on Restoring Housing Affordability | Scoop News

The housing situation should really be described as a “nonsense issue”, in that it is simply just a matter of following the numbers to ascertain where the problems are solutions are.

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Putting it even more simply … the major question we need to be asking is … when do the Authorities intend to free up land supply and finance infrastructure properly, so that new starter housing is ALLOWED to be built on the fringes for about $1,000 per square metre all up … as the Andrew Atkins THE REAL DEAL poster clearly illustrates.

I set out clearly within Section 4 of Christchurch: The Way Forward  what needs to happen.

There is nothing particularly special about the fringes, other than that they are an essential and sufficiently responsive inflation vent.

I don’t particularly care how people wish to live …  whether it’s in igloos, wig-wams, inner high density, suburban, fringe, lifestyle blocks or outlying towns … just provided they are paying True Market Value for the stuff.

With Christchurch (and Auckland too) now “severely unaffordable” on a 7.0 Median Multiple (adjusted Demographia data from 3rd Qtr last year), that means a household on $100,000 a year gross is paying $700,000 to house themselves, when in a normal market ( yes … normal) they would not be paying any more than $300,000.

So the suckers here in Christchurch are loading themselves up unnecessarily with excess bubble mortgages of about $400,000. With interests costs over the term of the mortgage add another $400,000 … total about $800,000.

So on a gross income basis, they are “charitably devoting” 8 years of their working lives to being unnecessary mortgage slaves … on a net (after tax) basis, likely 10 to 12 years of their working lives.

Wouldn’t that money be better spent on themselves, their retirement savings and their children?

Why do people unwittingly see Banks as more deserving than their children with these grossly inflated mortgages ?

Check out here what they are paying for townhouses / condominiums in Houston for example … Houston Real Estate Market - June and the new home pricing … Houston Area New Homes, Greater Houston Home Builders | NewHomeSource .

Is “normal” too much to ask for ?

With best regards,

Hugh Pavletich
Co author - Demographia International Housing Affordability Survey
Performance Urban Planning
New Zealand


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