Home affordability a distant memory

Rekindling the dream of Kiwis owning their own affordable home is the driving force for the Labour Party's Kiwibuild initiative.

Phil Twyford, the party's newly appointed spokesperson for housing, visited Tauranga this week meeting with Mayor Stuart Crosby and building companies to discuss Labour's plans to build 100,000 affordable homes during a ten year period.

Labour's housing spokesperson Phil Twyford visited Tauranga yesterday to hold talks regarding the party's Kiwibuild affordable homes initiative.

Phil says affordable homes in Tauranga is a high priority after ranking third behind Auckland and Christchurch as the most unaffordable city for housing with an average asking price of $415,000 in 2012.

Auckland is the least affordable market with a median multiple of 6.7 closely followed by Christchurch (6.6) and Tauranga-Western Bay of Plenty (5.9) while Wellington (5.4) and Dunedin (5.1) also rate as severely unaffordable.

Affordability is measured through the median house price, currently at $380,000, with Tauranga sitting nearly six times above the median wage and three times above the unaffordability mark.

Information shows one of the main reasons housing is unaffordable is the lack of new entry houses after homeownership for entry-level homes rose to 35 per cent in the 1960s and 1970s, but now sits at just five per cent.

Phil believes 60 per cent of Tauranga residents who want to buy a house are severely disadvantaged as many earn on or below the average $70,000 wage and during the past five years 66 per cent of houses built have tipped the $400,000 mark.

'It would be a real struggle to buy a house for $400,000 for many of them. It's a concern because we are not delivering what people need.

'It's pretty similar to see in Auckland where the builders are not building affordable homes because they cannot make a dollar from it. They are instead at the top end of the property market.”

By launching New Zealand's largest public building programme in more than 50 years, the initiative aims to provide 2000 apprenticeship opportunities and generate $2billion a year in economic growth.

To kick start the programme, Labour will look to create a $1.5billion fund by working closely with councils and the private sector to develop and build the houses with all money returned to the fund following completion.

Phil says the meetings with Mayor Crosby and Tauranga building firms, DNA Modular Creations and Ezy Line Prebuild Homes, were instructive gaining feedback on how they approach the building sector and how it might offer opportunities for Kiwibuild.

'We are looking to provide healthy, affordable houses that will appreciate as assets for the families that live in them. There are real benefits to the whole community.

'Looking at today's younger generations, it basically means you feel depressed and have that feeling of being locked out. That's why I think so many young people do not see a future in New Zealand and are moving to Australia.”

4 comments

Red tape

Posted on 07-03-2013 12:03 | By YOGI

All the fees ex Councils added to the costs of sections and building, in TCC about $80,000 a home, no wonder the prices of houses and especially sections have rocketed upward and out of reach of most. Worse is to come as Councils react to the level of self-bungling of the past that has resulted in all the leaky homes, Council insurances/claims increases by billions across NZ, a 25% share is estimated at $6 billion, TCC's share is about $300 million of that maybe more and that is just the mess in the residential market, commercial is more and larger claims. The options are VERY limited to avoid this, perhaps "tent city" is the answer on the outskirts of town AKA Seweto?


Can do in a past life

Posted on 07-03-2013 14:20 | By YOGI

They call that progress, better, wonderful and like we live in the Western world and no one can afford a home anymore? The news and media hype is all off target here and getting worse, result of it is that people will have to rent a house for life, that is not the kiwi way of years gone by, but it is now how it is.


Wull they Borrow that Start Up Capital?

Posted on 07-03-2013 15:46 | By carpedeum

Did Mr Twyford mention where that $1.5 Billion initial fund will come from - their ( Labour) policies are usually to borrow- hells bells- it has taken the current Governement five years of harsh cutbacks in all sectors to get rid of the MASSIVE OVERSEAS DEBT that the last Labour Gvt put this country into- PLEASE lets not even think about that amount of borrowing - or is there another source they have in mind???


unaffordable

Posted on 07-03-2013 15:50 | By taurangaite

maybe the council could start by reducing their over-the-top fees charged for permits. You can actually get a budget house built for under $100k, so I don't think the house itself is the problem, but when you're looking at the budget sections still costing $200-$250k plus the council fees and most needing at least $10k of earthworks, it makes it unrealistic for anybody and you've still only got a small house on a very expensive piece of land! It would also be helpful if employers in Tauranga stopped with the '$10 Tauranga' attitude - yes it does exist! (or perhaps that should now be '$13.50'); and start paying wages comparable to other main centres, rather than just give the poky excuse that you get paid less because you get to live in a nice place!


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