Archive | Government programmes

National says rent & homebuying subsidies are good, I say they’re pure inflation

Prime Minister & former Finance Minister Bill English said it last Monday and his party came it again yesterday: the Government is propping up the rental market and, yesterday, it would make more money available to first-homebuyers so they can pay a deposit.

The Stuff website took the first story from one side, leaving the further consequences alone.

Image above: Prime Minister Bill English during TV3’s leaders’ debate.

Subsidies flow straight through

Both policies are widely acknowledged ways of feeding landlords & home sellers – though ostensibly supporting impecunious buyers & renters. I wrote in 2009 that Australia’s Housing Industry Association criticised that country’s first-homebuyers’ grant – introduced in 2000 to overcome the impact of GST – because it reduced affordability because it flowed directly through to the property seller’s bottom line.

Mr English said in the second televised leaders’ debate on TV3 that the Government spent up to $6 million/day propping up New Zealand’s private rental market. The $2.3 billion/year in rent subsidies supported 60% of private tenants, and Mr English argued it was helping to keep many Kiwis out of poverty.

Social Housing Minister Amy Adams said the Government supported 320,000 of New Zealand’s 550,000 rental households.

Look at these subsidies another way: What would happen if they weren’t paid? Beyond the initial assumption that all those no-longer-subsidised tenants would be evicted, who would pay the rent? Their places would not be immediately filled.

The argument here is that it is not the tenant being subsidised, it’s the landlord. The consequences of ending the subsidy would, in due course, be that rents would fall so landlords could get tenants. That, in turn, would affect rental yields and, again in due course, would tell both prospective landlords & banks that the prices of houses intended for rental were too high.

All round, in due course, adjustments would be made.

Homebuyer support runs same course

Yesterday, Ms Adams and Building & Construction Minister Nick Smith (now spokespersons in the election campaign period) said National would double the financial support available to first-homebuyers when buying an existing house, and increasing it for new builds.

Ms Adams said of the measure to make it easier for first-homebuyers to get a deposit: “National believes every New Zealander should be able to buy their own house if they want to – so we are building on our existing suite of measures to support first-homebuyers.”

National would raise the Government HomeStart grant for a couple by $10,000 to $20,000 for an existing home, and to $30,000 for a new-build.

“The additional grants mean there is funding to help a further 80,000 people into their first home over the next 4 years, on top of the 31,000 people the scheme has already helped,” Ms Adams said.

Building and Construction spokesperson Dr Nick Smith says HomeStart Grants complement other Government measures to support first home buyers, including:

Welcome Home Loans allow first-homebuyers to access Government-backed mortgages with a 10% deposit, and KiwiSaver FirstHome withdrawals allow them to access all of their KiwiSaver funds to put towards a deposit.

Dr Smith added these available funds together: “Take a couple on the average wage in Auckland who have been in KiwiSaver for 5 years and are looking to buy their first home. Between the $20,000 HomeStart grant and their KiwiSaver withdrawal, they will have around $60,000 for a deposit for an existing home.

“Add in a Government-backed Welcome Home loan, which means they only need a 10% deposit, and they have enough for a house worth up to $600,000 – the Auckland HomeStart cap for existing homes – without needing other savings.

“That’s significant support for those New Zealanders, particularly given 18% of home sales in Auckland in the past year were below $600,000.

“If that couple lived in Palmerston North, they would have enough for a 20% deposit on a $300,000 house, without the need for a Welcome Home loan.”

Ms Adams said National would also simplify the process for borrowers, combining HomeStart grants & Welcome Home loans into one HomeStart product, so first-homebuyers could get all the support available to them from one place.

“We will simplify the application process for Welcome Home loans to allow accredited banks to approve these 10% deposit, Government-backed loans on the spot, rather than going through an often time-consuming process with Housing NZ,” Ms Adams said.

Dr Smith said National’s policies would help 200,000 new houses be built over the next 6 years – the equivalent of 4 extra Dunedins.

“We are increasing our support for first-homebuyers and making it easier to access, to further help young New Zealanders achieve their dream of owning their first home.”

The changes would come into force on 1 January 2018 and have been priced at $74 million/year, to be met from the 2018 Budget allowance. Costs in 2017-18 would be met from the between-budget contingency.

If – as Australia’s housebuilding organisation believes, and I understand numerous NZ Treasury recommendations have agreed (sources to come) – feeding the borrower or prospective tenant actually feeds the seller or the landlord, what is the outcome? Higher prices.

The Government has been feeding inflation via subsidies – and National intends to lift that inflationary input.

Links:
Stuff, 6 September 2017: PM Bill English says Govt spends billions propping up the private rental market

Earlier stories:
12 October 2016: First-homebuyers hit KiwiSaver for over $500 million in deposits
25 August 2014: National promises easier access to first-home money, Pavletich says it’ll fuel housing inflation
1 October 2013: Housing NZ offers first-homebuyers deal to buy empty old provincial stock
22 May 2015: Smith launches fund to build houses on Government land
27 March 2015: Parliament passes KiwiSaver HomeStart Bill
29 July 2013: Shearer says Labour will block overseas speculators; plus some extra statistics
23 October 2009: Australian incentives boost construction, hurt affordability

Attribution: Ministerial/party releases, Stuff.

Continue Reading

New Crown entity will advance housing infrastructure

The Government has lodged the documents to establish a new company, Crown Infrastructure Partners Ltd, to support development without breaching local council debt constraints.

Auckland Council has been tiptoeing just below its debt:revenue ratio limit of 265%, and put the concept to the Government of a special purpose vehicle to fund infrastructure in a way that recognises those debt constraints.

Instead of the council funding infrastructure for new development, it will come from the Crown company. Auckland mayor Phil Goff said yesterday this would enable construction of 23,300 homes in the north & south of the region to be brought forward.

Mr Goff said the announcement was made at Drury, in South Auckland, because that was likely to be the first place the new funding would be used, for 700 homes.

Mr Goff said: “The initial investment of $387 million in transport & water infrastructure in Drury South & West, Paerata & Pukekohe will enable the construction of 17,800 dwellings much earlier than would otherwise be the case.

“A further major development will be around Wainui in north Auckland, with $201 million in infrastructure funding required for an additional 5500 dwellings.

“The new investment vehicle will provide capital from the Government & the private sector which will not be debt on the council’s books. It will be funded through development contributions & targeted rates within the new housing developments.

“Auckland is growing by 45,000 new residents/year and requires unprecedented levels of infrastructure growth to keep up with demand. Increasing the supply of housing is a critical part of overcoming our housing shortage and slowing price rises caused by demand exceeding supply of housing.

“The new unitary plan ensures there is adequate land – greenfield & brownfield – to meet demand, but infrastructure servicing that land is necessary for homes actually to be built.

“Special purpose vehicles are another tool in our toolbox to enable us to lift the scale & pace of new housing development.”

Attribution: Mayoral release.

Continue Reading

Hobsonville Land aims for more houses below median price

HLC Ltd has begun a programme with its builder-partners to increase the supply of new homes at or below the median price of homes in the vicinity of Hobsonville Point, currently $884,000.

HLC is the Government-owned company, formerly the Hobsonville Land Co Ltd, which is engaged in residential land development at Hobsonville Point, and now also at Northcote.

Chief executive Chris Aiken said on Friday the programme would focus on the Buckley B & Te Uru precincts at Hobsonville Point, where 500 homes would be built over the next 4 years at or below the average of the median house prices for the former North Shore & Waitakere cities, as published by the Real Estate Institute every month.

The homes built as part of this programme will be mainly 3- or 4-bedroom homes. Some 2-bedroom homes would also be built, and they’d mostly be terrace houses or apartments.

Mr Aiken said this programme was in addition to the company’s programme to deliver Axis series homes, currently priced at or below $650,000. 20% of all new homes at Hobsonville Point will be Axis series homes.

He said: “The only way to reduce house prices in Auckland is to increase the supply of housing below the median price,” but add that the builders were also motivated by the commercial opportunity: “This is the part of the market in which demand is greatest. Continuing to only build big expensive houses on large sections isn’t meeting the majority of market need.

“Auckland is changing, with more one- or 2-person households, and many homeowners prioritising lifestyle & amenity over a backyard or large house.”

Mr Aiken said these homes would be sold on the open market by the 8 building companies participating in the programme, and would not use a ballot system sometimes required for Axis series homes when demand exceeded supply.

Buyers must buy the property in their own name and be owner-occupiers, meaning the buyer must live in the home for a minimum of 2 years after purchase.

The first homes to be built as part of the programme are expected to be ready for occupation from mid-2018, but some are already available to buy off-the-plan through Ockham Residential Ltd & Classic Builders Group Ltd.

Attribution: Company release.

Continue Reading

HLC lifts Axis housing price cap, aligns income caps with HomeStart

Housing NZ Corp subsidiary HLC (2017) Ltd – the former Hobsonville Land Co Ltd – will raise its price cap for Axis Series “affordable” homes at Hobsonville Point from $550,000 to $650,000 on Saturday, 1 July, and will adjust income caps to align with KiwiSaver HomeStart grants.

Axis Series sections are smaller to keep the cost down, but the homes contain features such as double-glazing, extra insulation, rainwater capture and a weather-tight warranty.

HLC chief executive Chris Aiken said on Friday the income cap for individual buyers of Axis Series homes would come down on Saturday from $120,000 to $85,000 to be consistent with the HomeStart grant criteria. The income cap for couples (or 2 or more purchasers) will rise from $120,000/year to $130,000/year.

Anyone already approved under the old criteria will be unaffected.

Mr Aiken said Housing NZ would also take over the application & ballot process for Axis Series homes, although buyers of these homes would still buy them directly from the builders: “As the administrator of HomeStart, it makes sense for Housing NZ to also manage applications & approvals for Axis Series homes. This move will enable us to scale up the scheme as needed, as more new housing comes on stream across Auckland.”

Mr Aiken said a driver for raising the price cap for couples was to allow for more 2- & 3-bedroom homes to be delivered as Axis Series homes: “Rising construction costs have made it harder for our builders to deliver these homes under our current cap, and we risked losing diversity in our new stock as builders reduced home size to deliver within the price cap.”

HLC introduced Axis Series homes to its Hobsonville Point development before the launch of HomeStart, and Mr Aiken said it made sense to align this pricing with both HomeStart and the Government’s Welcome Home Loan criteria as many bidders for Axis Series homes were using these other services.

When the Government announced “affordable” price ranges in 2012, 10% of the houses were to be priced up to $400,000. Another 10% were to be priced between $400-485,000, 5% up to $450,000, 5% above.

The price caps were raised by $50-60,000 in May 2015, but 10% of homes were still to be built for $485,000 or less.

With the Axis price cap set at $650,000, at least 5% of homes will still be at or below $550,000 and at least 10% will be at or below $600,000.

Mr Aiken said that, as at 31 May, 422 Axis Series homes had been sold at Hobsonville Point: “We’re delighted with the market response, and pleased that our builder partners have applied such innovation & skill to ensure a high quality product even at more accessible price points.

“We know Axis has fostered new thinking in the affordable segment of the market with many builders, having developed techniques & approaches at Hobsonville Point, able to apply these more widely across their commercial building portfolio.”

Links: Axis series
Axis series, small home test lab

Earlier stories:
26 March 2017: Hobsonville Land becomes HLC
14 June 2015: Hobsonville Pt housing programme advanced, cheaper range ratio lifted
6 May 2015: Hobsonville Pt affordable brackets raised $50-65,000
19 March 2014: Hobsonville test lab points way to more housing innovation
19 November 2012: $485,000 top price for 20% of Hobsonville Pt housing
30 September 2009: Regional council approves urban limit shift days before first sod turned on Hobsonville development
8 June 2008: Comprehensive development plan for Hobsonville lodged
23 May 2008: Budget promotes Hobsonville project & separate affordability schemes

Attribution: Company release.

Continue Reading

Arvida retirement village part of planned Nelson housing explosion

The Tasman District Council approved 8 special housing areas on Thursday, including a 40ha subdivision in Richmond where Arvida Group Ltd intends to build an 8ha retirement village.

On the Arvida site: Development general manager Jonathan Ash & chief executive Bill McDonald.

The 8 special housing areas containing at least 1281 sections are the first the Tasman council has approved under the 2013 housing accord legislation.

Arvida chief executive Bill McDonald said the NZX-listed company expected to start building in 2018, and the $130 million development would be built on Arvida’s commitment to “broader community engagement, helping retirees to live a full & satisfying life post-retirement.

“We know that what was acceptable for retirement living in the past is not what people are looking for today & into the future. Kiwis are looking for retirement living to be an extension of their lifestyle, not a restriction.

“Our culture is all about improving the lives & wellbeing of every resident who lives in an Arvida retirement village. Life shouldn’t stop when you retire – it should get even better. This philosophy is the future of retirement living.”

Mr McDonald said the village, Arvida’s third in Nelson, followed high demand for retirement living options in the region: “Nelson Bays has a higher percentage of its population in the over-65 age bracket than the national average, so demand is high for retirement living options.

“The proposed new village is closer to the Richmond shopping area than most of the other villages, ensuring residents of the village are integrated & connected to the Richmond community. It will offer 150 villas, apartments & care suites. It will have outwardly facing community facilities, as well as a community-oriented village centre & homestead.

“This will be a retirement village unlike any other in the region. We are basing it on the quality of our architecturally acclaimed village in Cambridge with high quality design, community facilities & homes.”

The retirement village will form part of a wider development of up to 700 house & land packages, The Meadows, to be developed by locals Andrew Spittal, Simon Collett, Gary Donaldson & Graham Vercoe through Home Living Solutions Ltd.

Mr Spittal, who’s project manager, said: “We are delighted to have Arvida as a key partner in the development. We have a very similar vision of wanting to create a place where there is a real sense of community, one that embraces intergenerational living and is designed & built for the future.”

Link:
Tasman special housing areas to deliver 1281 homes

Attribution: Company & council releases.

Continue Reading

Adams recognises importance of community, not just housing

The Government’s Hobsonville Point development reached a landmark 1000 homes occupied this week, celebrated with a visit to the latest residents by Social Housing Minister Amy Adams and local MP (and deputy prime minister) Paula Bennett.

HLC Ltd (ex-Hobsonville Land Co Ltd) chief executive Chris Aiken told the ministers 409 of new homes sold had gone to first-homebuyers and were in the “affordable” category, priced under $550,000. The average price across the development was $730,000.

Another 630 new homes are at various stages of production.

HLC has masterplanned the former Hobsonville airbase, but all the subdivisions on it are being carried out by private developers. The 1000th home, on Squadron Drive, is by Jalcon Homes.

Ms Adams, who’s also minister responsible for social investment, brought a different perspective to the housing role from her predecessor’s in a city where construction hasn’t kept pace with net immigration, let alone internal population growth.

Nick Smith, as housing, building & construction minister (and he retains the last 2 of those titles), was all about getting construction numbers up, and never sounded like he wanted to put that in context.

Ms Adams was pleased to see the 167ha of Hobsonville Point being turned into a vibrant community: “It’s not just about the new houses we’re building, it’s about the quality of community.”

Many of the homes at Hobsonville Point fit HLC’s Axis series design of cheaper, highly efficient construction, and Ms Adams said that raising the standard in this way would have an effect far beyond Hobsonville Point.

She also noted that, although the Government had instituted a programme of putting Crown-owned land to more productive use, including housing development, its holdings represented only 5% of housing land in Auckland.

Crown land is being used to lift construction output, and Ms Adams said that was a strategy that could be adopted in future downturns, to help the sector meet capacity requirements.

She also visited a new $12 million transitional housing complex on Puhinui Rd, Manukau, yesterday, and put that spurt of emergency accommodation into perspective: “When we think about social housing, it’s not just the number of houses [or flats or motel beds]. You have to think: Is there a market of houses we can move people back into?”

Hobsonville Point is one of many developments around the Auckland which have begun to lift construction from the low point in 2011, when only 13,500 consents for new homes were issued nationally. In the last 12 months, 10,200 consents have been issued in Auckland alone.

The 72-unit Puhinui Rd facility will help house up to 560 families/year, out of an estimated 3660 Auckland families and 8600 nationally who would need transitional housing in a year.

Attribution: HLC & ministerial releases, Hobsonville visit.

Continue Reading

Pt England housing development bill passes second reading

The Point England Development Enabling Bill, to turn 11.7ha of the 48ha Point England Reserve over to housing and to advance Ngati Paoa’s historical Waitangi Treaty settlement, passed its second reading in Parliament on Tuesday by 62 votes to 43.

Building & Construction Minister Nick Smith said having 18ha on the Tamaki River fenced off for cattle to graze for over 30 years was a poor use of Crown land just 10km from Auckland’s city centre: “We are going to use 12ha for new houses & 2ha for a marae, as part of a treaty settlement with Ngati Paoa. The remaining 4ha will be added to the 32ha of public reserve space.”

Dr Smith said the legislation would guarantee an increase in the accessible public space, retaining at least the same area of playing fields and committing to spending all of the Crown’s proceeds from the housing development in enhancing the local recreational facilities & environment.

Earlier stories:
19 December 2016: Bill to enable housing on Pt England Reserve passes first reading
7 December 2016: Ngati Paoa to build 300 homes on Pt England Reserve, talks continue on reserve upgrade

Attribution: Ministerial release.

Continue Reading

National promise of 34,000 houses/decade for Auckland may add 2000/year

The headline is what matters in an election campaign, and the headline is that National is promising that, as the government, it will build 34,000 new houses on Crown land in Auckland over the next 10 years.

New Zealand has a record of not electing governments beyond 3 terms and National is ending its third term as the majority in a coalition, which jeopardises the chances of it being in a position to carry out the promise.

Social Housing Minister Amy Adams.

Amy Adams, Social Housing Minister and Minister Responsible for Housing NZ, revealed the figure in a speech at the Property Institute in Auckland yesterday. And then she proceeded to whittle it down.

The 34,000 is made up of 13,500 new social houses & 20,600 affordable & market homes.

Under the Crown Building Project, the Government will take down 8300 old, rundown houses.

Ms Adams said Housing NZ alone had over 50 housing developments under way in Auckland. The forward programme includes other housing projects already announced & underway:

  • Northcote, where 300 state houses will be replaced by 1200 new homes
  • Hobsonville Point, where the Government-owned Hobsonville Land Co Ltd (now HLC (2017) Ltd) is about to deliver the 1000th house in a programme to deliver 4500 homes
  • Tamaki, where the government-council regeneration project has a programme to develop 7500 new homes over the next 15 years, replacing the houses on 2800 Housing NZ properties
  • Other existing projects include 2700 new homes already announced under the Crown land programme, 580 houses under the Ministry of Social Development’s social housing reform programmes, and new homes for emergency & transitional housing.

By Ms Adams’ calculation, the Government would add 24,000 new – not previously announced – houses over a decade, though on the figures above the actual total might be less, perhaps down at 20,000, or an average 2000/year.

Comparing promises

Andrew Little.

That compares with Labour leader Andrew Little’s proposal last year for 100,000 new affordable houses nationally over 10 years, half of them in Auckland, which would include partnerships with private developers.

So, on top of existing projects, Labour has promised 5000 and National 2400 extra houses/year for Auckland.

Labour also promoted a dole for apprenticeships policy which would subsidise employers to take on around 4000 young people for on-the-job training in fields including building & construction.

Phase one of National’s Auckland housing programme, which covers the next 4 years, would cost $2.23 billion and be funded through Housing NZ’s balance sheet and $1.1 billion of new borrowing that the Government has approved as part of the business case.

Phase 2 in the latter years would be funded through the market housing development part of the programme & rental returns.

Ms Adams said ministers had also agreed that Housing NZ would retain dividends & proceeds from state house transfers, to help fund the building programme.

A glance at reality

The promises come after a period of extremely high immigration – a net inflow of 228,000 nationally over the last 4 years, 108,000 of those in Auckland, requiring 40,000 homes at an average 2.7 persons/household.

Building consents in Auckland over those 4 years started low, 6500 for the March 2014 year as the country was still gradually easing out of the global financial crisis, and totalled 34,200 for the 4 years.

Assuming 100% construction of consented homes (which is not normal, but I don’t have the exact figure), Auckland fell short of housing the net migrant inflow by almost 6000 homes over those 4 years. That housing requirement ignores, completely, the net flow of people within the country.

The National proposal might fill the gap if immigration eases, but on the slim information from the minister it would encourage pricing to stay high. On my calculation in February, consents for new homes nationally (excluding land) have risen 34% in value over the last 5 years – after a slow shift from the bottom of the market, between 6-7.7%/year for the last 4 years.

The land price equation in Auckland can be partly met by intensification throughout suburbia, land prices falling because of the freer availability of sites under the new unitary plan, and section sizes being reduced.

That doesn’t require tampering with rural:urban boundaries, which Labour has said it will eliminate. Those boundaries have a role in protecting non-urban land and in directing development into more efficient parcels.

Auckland also needs more infrastructure for housing development, but it needs to be in well devised communities with a supply of jobs nearby, not on the basis of rural carpetlaying. The local job requirement is fundamental but has been ignored as Auckland has spilled out along motorway corridors.

To catch up, New Zealand needs more builders with a longer future in the trade than the typical construction cycle allows. To do that, either the Government or some other industry supporter needs to ensure trade skills are being taught to enough people before a boom gets underway, and it makes sense to reduce booms, and therefore busts, with some smoothing of economic cycles (but not the total smoothing the US tragically & farcically tried in its attempt to avoid what became the global financial crisis).

As a cyclical high recedes, the building force needs attractive alternatives other than leaving for Australia. Some of that can come through infrastructure projects, which ideally should be separated in time from highs in house & commercial construction, thus reducing cost pressures as well.

Link:
Full Adams speech, 16 May 2017: Launch of Crown Building Project

Earlier stories:
16 May 2017: Little calls for end to negative gearing, and Property Institute calls it “cynical ploy”
6 March 2017: Auckland above 10,000 home consents/year again
10 February 2017: Smith exultant about figures that are plainly inflated
19 January 2017: Building consent highs still don’t match migrant demand
11 July 2016: Little sets out 8 planks to remedy housing issues
19 November 2012: Shearer proposes Government scheme to build 100,000 “entry-level” houses over 10 years

Attribution: Ministerial speechnotes & release, Statistics NZ tables, Labour releases, own articles.

Continue Reading

Little calls for end to negative gearing, and Property Institute calls it “cynical ploy”

Labour Party leader Andrew Little renewed the party’s call to eliminate negative gearing on residential property investments yesterday, and was promptly accused by Property Institute chief executive Ashley Church of making “a cynical electoral ploy [that] risks making the country’s housing crisis significantly worse”.

The party campaigned to end negative gearing in 2011. This time, Mr Little proposed reducing negative gearing by 20%/year over 5 years and spending the estimated $150 million saved on $2000 grants to 600,000 homeowners to insulate their homes.

Mr Little’s call was to “crack down on speculators”, which included banning foreign speculators from buying existing homes: “This will remove from the market foreign speculators who are pushing prices out of reach of first-homebuyers.”

He said Labour would tax property speculators who flick houses within 5 years, and end their ability to use tax losses on their rental properties to offset their tax on other income, “which gives them an unfair advantage over people looking to buy their first home”.

Expanding his point, Mr Little said: “Homebuyers are being locked out of the market by speculators. Losses from rental property investments will be ring-fenced. Speculators will no longer be able to use tax losses on their rental properties to offset their tax on other income, a practice called negative gearing. This move has been recommended by the IMF & the Reserve Bank.

“The biggest users of this loophole are largescale speculators who own multiple rentals and use losses on new acquisitions to continually reduce their tax. The speculators’ tax loophole helps them outbid homebuyers for properties because the taxpayer effectively subsidises part of their cost of servicing mortgages.

“Ending this loophole will not affect most people who have bought a single rental as a long-term investment because most of them are not using it. Those [small investors] that do use this loophole generally only do so for a few years after purchase.”

Church calls it envy politics

Mr Church said the suite of housing proposals Labour announced last year was smart, but on this one he accused the party of “resorting to a form of envy politics designed to set one section of New Zealand society off against another. The policy is a direct attack on mums & dads who are trying to provide for themselves in retirement and be less of a burden on the state.

“Mr Little’s use of the word ‘speculators’ to describe property investors is mischievous. Speculators are people who buy & sell property very quickly in the hope of making a quick buck – whereas investors are people who buy for the long haul – providing housing to thousands of New Zealanders in the process.”

Mr Church said the policy, if implemented, would have a dramatic & rapid effect on the supply of private rental accommodation, creating a problem which would ultimately fall back on the Government: “Your typical property investors are average mums & dads – not wealthy cigar-smoking fat cats – and their ability to purchase an investment property is usually leveraged against the equity in their home & their ability to claim losses in the early years, like any other business does. This move would certainly stop them investing – but in the process it would quickly lead to a shortage in rental housing which would fall back on the Government – so it would end up costing the taxpayer a lot more in the long run”.

Mr Church noted that negative gearing is only a factor in the early years of a property investment: “Over time, rents rise and properties become ‘positively geared’ – at which point the additional income becomes taxable. Is Labour suggesting that they will forgo this tax income – or that they’ll make property investors pay tax on profits while removing the ability to claim losses?”

Need is “to harness family investment”, not to discourage it

He said his biggest concern was that Labour was proposing a policy to reduce private investment in property at a time when private investment in new houses “is probably more important than at any other time in the nation’s history – the Government, and parties who want to be in government, should be proposing policies that increase private investment in the construction of new dwellings as quickly as possible – exactly the opposite of what Labour is proposing.

Instead, Mr Church said there was “a need for smart & innovative solutions that harness the power of mum & dad investment to get those houses built quickly. That might include giving preferential tax treatment to investors who build, or buy, new homes – not punishing them for doing so”.

And he questioned Mr Little’s level playing field: “That’s absolute nonsense. Homebuyers & families aren’t being closed out of the market by investors – they’re being closed out by loan:value restrictions that require them to have a 20% deposit at a time when house prices are at historically high levels. The best way to fix that is to remove those restrictions on first-homebuyers – not blame those who are providing rental accommodation to those who choose not to own.”

Labour plan includes big build, training programme & elimination of Auckland urban boundaries

Labour does have a development plan, announced last year, to get 100,000 houses built quickly under its KiwiBuild programme, which would include partnerships with private developers.

Mr Little said Labour would establish an affordable housing authority to work with the private sector to cut through red tape and get new homes built fast. “It will partner with private developers, councils & iwi to undertake major greenfields & revitalisation projects, building affordable homes with KiwiBuild & the private market [but the company names Kiwibuild Ltd & Kiwibuild.nz Ltd have already been registered by private company owners]. These homes will be part of great communities built around parks, shopping centres & transport links.

“Labour’s KiwiBuild programme will build 100,000 high quality, affordable homes over 10 years, with 50% of them in Auckland. Standalone houses in Auckland will cost $5-600,000, with apartments & townhouses under $500,000. Outside Auckland, houses will range from $3-500,000.

“Increased house-building will require a larger workforce. Labour’s dole for apprenticeships policy will subsidise employers to take on around 4000 young people for on-the-job training in fields including building & construction. Labour’s policy of 3 years’ free post-school education will see tens of thousands more people study in all fields, including building & construction. KiwiBuild is projected to create 5000 new jobs at its peak.

“Labour will remove the Auckland urban growth boundary and free up density controls. This will give Auckland more options to grow, as well as stopping landbankers profiteering & holding up development. New developments, both in Auckland & the rest of New Zealand, will be funded through innovative infrastructure bonds.”

Link: Labour policy, Levelling the playing field for first-homebuyers

Attribution: Party & institute releases.

Continue Reading

Hobsonville Land becomes HLC

Housing NZ Corp subsidiary Hobsonville Land Co Ltd changed its name to HLC (2017) Ltd on Tuesday, and has changed its trading name to HLC, representing “Homes Land Community”.

Chief executive Chris Aiken the change came as the company widened its focus to additional largescale developments around Auckland.

The company was formed to develop Hobsonville Point, the former NZ Defence Force site on the Upper Waitemata Harbour, and celebrated 10 years of residential development last year.

1000 homes have been built at Hobsonville Point and it’s now home to 2310 residents. About 500 more new homes/year are being built. On completion, the 167ha masterplanned development will have 4500 houses & over 10,000 residents.

Mr Aiken said the company had learned a great deal about building quickly at scale, and in a quality way that would foster strong communities and produce affordable homes.

Attribution: Company release.

Continue Reading
WordPress Appliance - Powered by TurnKey Linux