During the previous Government housing was a major headache for a lot of people. Market oriented policies, increased international pressure and poor domestic policy making all combined to overheat something that was supposed to keep prices competitive. And at the end of the day, the working man was the one who paid the price. But a year after National exited office, there still seem to be unrealistic expectations of what New Zealanders can afford – or are prepared to pay.
Kiwi Build need to get realistic about the ability of people to afford their offerings. The simple fact of the matter is that our incomes, combined with their unrealistic prices and the high demand which means competition to get into one will be strong.
Some of the houses on offer are going for more than N.Z.$650,000 which is simply too much. It might be fine if one is on a high income, but what about the many who do not earn six digit figure incomes even before tax? What about those who cannot afford to put down a deposit, which is what is often needed in order to buy a house?
I earn $17.76/hr before tax. After income tax, but before further deductions for Kiwi Saver and ACC and so on are made I have $14.65/hr. What hits my bank is therefore not quite what I start of with before tax. Add in board and $125 per week for long term savings and what I have is significantly less than the $36,900 before I started divvying and subtracting. That says nothing about all the other weekly costs most people would have to pay.
Yes, Kiwi Build is meant to target New Zealanders wanting to get on to the property ladder and own their first house. But right now the cost to many New Zealanders is simply out of their current reach, but likely future reach even with higher incomes or sharing the costs with a spouse.
Minister in charge Phil Twyford is making a botch of the issue. At no point has Mr Twyford seemed like he is in full control of this very important portfolio, with a range of concerns:
- Lack of ambition – an arguable one, but it was raised by economist Shamubeel Eaqub
- An apparent lack of effort to engage the designers of microhousing, which has minimal floor space and could be an option for those not wanting a full house, but one that is suitable for just being a place to eat and sleep
- How to counter urban sprawl and get councils to promote apartment living
In fairness to him each house has other costs associated with it such as getting resource consents, paying the tradesmen to put it up and including the necessary services such as electricity, running water, sewerage and a driveway of some sort. Paying for these as well as allowing for competing market demands means that even if Mr Twyford is able to get the housing portfolio down pat his hands maybe somewhat tied by forces out of his control.
But that does not change the fact that as Minister in charge Mr Twyford has to take ownership of the problems posed and do his best to fix them.