A Government move announced yesterday to make it easier for first home buyers to get a house would cover only 10% of the new homes expected to be built under Auckland’s Unitary Plan.
The plan presents a feasible development for houses and apartments which show that only 24,404 of the 246,774 dwellings considered feasible to build within the new boundaries would cost less than $700,000.
But yesterday Housing Minister Nick Smith announced the Government was increasing the income and house price caps of the KiwiSaver HomeStart scheme which is aimed helping people buy their first home.
“ We are adjusting the income and house price caps to take into account increases in both since the scheme was announced so as to ensure it achieves its objective of helping middle-income earners into a modest home
“The income caps will increase tomorrow from $80,000 to $85,000 for a single person and from $120,000 to $130,000 for a couple.
“The house price caps are being increased from the existing $350,000, $450,000 and $550,000 depending on region to $400,000, $500,000 and $600,000 for an existing home, and to $450,000, $550,000 and $650,000 for a new home.
“This reflects the $50,000 increase in the national median house price since the scheme began. We are deliberately increasing the cap for new homes by an additional $50,000 to help drive growth in new residential construction.’
That would seem unlikely in Auckland where the price has been capped at $650,000.
Labour Leader Andrew Little said that even if someone could find a house at that price, the mortgage on a $600,000 home cost nearly half of the median Auckland income.
(Labour provided figures to show that depending on the size of the deposit, the annual mortgage payments on a $650,000 home would be between around $31,000 and $35,000 a year.
“Lacking any credible plan of its own, National is relying on the Auckland Council’s Unitary Plan to tackle the Auckland housing crisis
“But these numbers show that under the Plan very few affordable homes will be built.”
The President of the Auckland branch of the Property Council underlined just how unaffordable homes are in Auckland on TVOne’s “Q+A” yesterday.
He said that without a major supply or demand shock nothing would change.
“ What we see at the moment is we’ve got capacity constraints in the construction market and the development market,” he said.
“We don’t have enough players, we don’t have enough tradies, we don’t have enough materials,”
He said it was taking six to nine months to get pre-cast concrete, which is one of the most preferred methods of construction, “given our leaky building history”.
A measures of just how stretched the construction is came with the release on Friday of housing consent statistics.
More than 29,000 new homes gained building consent in the year to June 2016, up 16 percent from the previous June year, Statistics New Zealand said.
“The annual total of 29,097 is the highest for a June year since 2004, when it was more than 33,000,” business indicators manager Clara Eatherley said.
“Auckland and surrounding regions were the main contributors to this growth. Canterbury’s total decreased over the year, but remains at a historically high level.”
There were 9,651 homes consented in Auckland in the latest June year, up 16 percent on the 2015 year.
Even with that building boom, house prices in Auckland have gone up about 80% over the past four years. “ We’ve had an 80% increase in house prices in four years.
“It wasn’t forecast. It’s—you know, neither Labour nor National was predicting anything like that,” said Mr Eaton.
“No one saw it coming. So, you know, we can’t blame anyone for it, necessarily, but it’s changed the game.
“ So now house prices are less affordable, and without a supply shock, or without a demand shock, that will continue.”
And even then as Auckland Council CEO, Stephen Town told POLITIK last week, affordable housing in the city is going to be an apartment in a suburb like New Lynn — or, possibly, a house as far as Pukekohe or Warkworth.