Damned if it Does, Damned If It Doesn’t


Impact of NZ government ‘special areas’ housing plan under fire
In its bid to reign in runaway housing prices in Auckland, the New Zealand government has just announced the first 11 special housing areas upon which 6,000 new homes are to be built. The move is in line with the government’s strategy to address the issue at heart of the price rise pandemic – a growing shortage in the face of rising demand.
It comes as no surprise that the areas designated for development – East Tamaki, Papakura and Pukekohe in the south and West Harbour, Kumeu and Hobsonville in the west – lie on the urban periphery. The fact that all of these areas are going to have a high development density is also nothing new, but what is of concern to some residents is how effective the move is going to be at bringing prices within striking distance of the average Kiwi house buyer, especially considering that only small percentage of the proposed houses will fall within the affordability bracket of the average Kiwi household.

Only 10% of new homes to be affordable

With only 10% of the 6,000 new homes being built as ‘affordable housing’, the motives of the government in this case are being questioned. The move is coming under increasing vitriolic fire from the opposition, with Labour’s housing spokesperson , Phil Twyford, sniping that the development would result in ‘row upon row of ‘Mcmansions’ leaving nothing but crumbs for Kiwi families looking to buy their first homes.
For example, In Huapai, where 2,000 homes are planned on being built in the nearby 65ha Haupai Triangle, newly developed houses that have already been built on an average land size of 600m2 have been sold for $750,000 and more. So, the question remains on many would be home buyers’ minds as to just what the priority of the government is here. Some hecklers are even pointing out that the only ones who look to come out on top of the whole ordeal will be the developers.

Local residents up in arms

Employment opportunities are another key issue being raised by critics of the move. Many claim that those who move out to Kumeu, for example, face the prospect of a lengthy and possibly costly commute to areas of the city where employment can be found. Not to mention the impact on the existing transport infrastructure thousands of new residents is going to have. Many local residents in the areas scheduled for development are up in arms about the impact of the population growth that looks to be coming to their areas.
From the government’s perspective it seems that no matter where they tread toes are being stepped on. Everyone seems to acknowledge that more houses need to be built, but it seems in many cases, it should just not be ‘here, where we live.

Will it work?

At the end of the day, once sleeves have been rolled down and the hubbub has died down to a dim murmur of discontent, the issue at stake is whether or not the planned move will have a lasting impact on the housing situation. Is it going to bring the surging housing prices back within range of the average Kiwi household and address the chronic shortage of affordable housing in New Zealand’s most populous cities?
Whilst it is clear that the government firmly believes the solution lies in balancing out the supply vs. demand equation, they have not been so naïve as to state that this is the only piece to the puzzle. Whilst the Reserve bank brings its price capping tools to bear in the form of restrictions on high LVR loans and many suspect OCR hikes next year, the government seems to be doing all it can to stem the situation from spilling out of control into other areas of the economy.
Real Estate Institute chief executive Helen O’Sullivan pointed out that the addition of these 6,000 new homes would aid in keeping house price pressure down but re-iterated that “It’s only one piece of the puzzle. There is no one thing that will fix [price pressures],”

Moving forward

The effect of the government’s plan remains to be seen. Whilst some applaud its action as ‘doing something at least’ others continue to hurl stones from the sidelines – the merit of which remains to be proven. First home buyers in the meantime can be advised to continue plugging away at a mortgage calculator NZ in their now uphill struggle to secure a home loan on


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