Quote of the day

June 17, 2015

I would unreservedly support a law change mandating stringent performance standards for rented properties provided that the following section is included in the legislation:

“Nothing in the Law of Supply and Demand nor the Law of Unintended Consequences shall apply to the provisions of this Act.”

This is really important because, unless Parliament can somehow prohibit those other laws from having an effect, extensive housing reform has the potential to make life much harder for many renters. . .

there can be no doubt that the impetus for reform comes from a place of good intentions. By any historical measure, New Zealand is a prosperous country. We should aspire to be a society in which the basic comforts of human existence are universally available – particularly to children, who bear no responsibility for the circumstances in which they are raised.

Nevertheless, it does not follow that we should disregard the known risks of forceful government intervention. At some point, the imposition of requirements on landlords will result in rents being driven up. That could make it difficult for poor families to find any accommodation at all.  – Liam Hehir


Quote of the day

April 8, 2015

 . . . Dunedin, Invercargill, Timaru and Nelson are seen as very affordable places for first-home buyers, but the consistent drift north of jobs and government services, in particular, make it difficult for young people to find work.

To find work, many go to Auckland or Christchurch, and the problem continues.

Dunedin has a median house price of $281,500 and Invercargill’s price is $210,000. If more could be done to encourage people to live and work in the South – say through a regional development policy – some of Auckland’s housing problems will disappear. . .  – ODT editorial

Andrei commented a few days ago on the family and other ties which bind people to familiar places.

That is a valid point.

But it doesn’t apply to everyone and moving for most of those for whom it does would still be far easier than it was for the immigrants who came here in past centuries from far further than the distance between Auckland and Dunedin.


5 objectives for social housing

February 20, 2015

National has five objectives for social housing:

1. Ensure people who need housing support from the Government get it.

2. Help social housing tenants to independence, as appropriate.

3. Ensure that properties used for social housing are the right size and configuration, and in the right areas.

4. Help increase the supply of affordable housing for people to buy.

5. Encourage and develop more diverse ownership of social housing.

That’s simple and sensible – unless you don’t understand that housing policy which works for the people who need help is more important than who owns the houses.


Why aren’t houses like cars?

February 5, 2015

This could be part of the solution to housing affordability:

In the 1970s the GM factory in Trentham turned out old-school Vivas and Chevettes. Today it was re-opened by the Hon Bill English with a role better suited to the 21st century – building homes.

Matrix Homes was established last year by Wellington entrepreneur Sean Murrie and architect Graeme Farr to produce quality affordable homes for two thirds the cost of traditional building methods.

Matrix Homes’ managing director Sean Murrie said, “Matrix Homes came about from our belief that New Zealanders pay millions more than they should for housing due to inefficient practices and markets.

“Our mission is to put that right by redesigning the build process. We set out to drastically reduce the cost of a new home without sacrificing the quality you expect in what is most people’s largest investment. By re-engineering the whole build process from the ground up, Matrix have made a quantum leap forward in affordability and quality.”

Matrix Homes are not built on-site but under cover in the Trentham factory. This enables work to continue irrespective of the weather. The cost-savings are achieved through greater efficiencies: economy of scale in sourcing building materials, standardised modular construction and no down time.

“Traditional ‘affordable’ housing focuses on reducing the cost of materials and results in a home that forever looks cheap. Matrix is a proper wood-framed house with timber weatherboards, cedar cladding is an option, Gib lined and with a galvanized iron roof. So far we’ve designed dozens of Matrix configurations for the three standard modules.

A range of sustainable options are also available including a full off-grid package including solar hot water heating and a self-contained wastewater system,” Sean Murrie said.

“With Matrix you get factory quality control and eliminate ad hoc on-site improvisation. Our design incorporates standardised window sizes enabling phenomenal savings. Assembling floors and walls on pre-built jigs has virtually eliminated the tape measure – the biggest single source of time and material wastage. Materials are pre-cut and perfect with each component optimised and identical.

“More often than not, your new home will be completed by the time you have planning consent and completed your site preparation. We can deliver virtually anywhere in the country and the modular format enables you to expand your home at a later date if required.”

Prices range from $89,000 for a one bedroom home of 51 m2, $99,000 for a 70m2 2 bedroom home to $195,000 for a 4 bedroom, 2 bathroom home of 140 m2. Pricing includes floor coverings, painting, oven, cook top, range hood, laundry tub, corner shower, hand basins and vanity units, heated towel rail and extractor fan. Transport, piles and installation are in addition. While homebuyers are responsible for site preparation, Matrix can organise this on their behalf.

Homebuyers can personalise their home by selecting options including decks, garages and heat pumps and the like.

When the factory reaches full production, economies of scale will enable the costs to be further reduced to around half that of a same sized house build on-site.

The factory currently employs six people fulltime with that number expected to grow to 70 by the end of this year.

Sean Murrie said, “A Show Home has been completed and the concept has attracted considerable interest from home buyers and property developers and we are now completing the final design details for a large number of customers. By the end of 2015, we expect to be building one house per day and are aiming for 1,000 per year when the factory reaches full production. Realising this goal will help contribute to lowering the cost of new housing and develop a sustainable manufacturing business in the Hutt Valley.”  

How much did it cost to buy an average car and an average house 50 years ago and how much does it cost now?

I can’t give the exact figures but I cam confident that the increase in the cost of the average car is far less than the cost of the average house?

Several factors will be responsible for that, one of those is that we get mass produced cars but we don’t get mass produced houses.

These houses aren’t mass produced but the time and cost involved in building them is a lot less than conventional methods.


A better way of doing things

January 28, 2015

Prime Minister John Key delivered a speech on social housing today.

Highlights include:

“The experience of countries like Australia and the United Kingdom is that having non-government organisations providing social housing, alongside the government, is a better way of doing things.”

“The experience of countries like Australia and the United Kingdom is that having non-government organisations providing social housing, alongside the government, is a better way of doing things.” www.national.org.nz/socialhousing

Around a third of Housing NZ properties are in the wrong place, or are the wrong type to meet existing and future demand.

Around a third of Housing NZ properties are in the wrong place, or are the wrong type to meet existing and future demand.<br /> www.national.org.nz/socialhousing

“It’s part of the Government’s wider approach to delivering better public services to New Zealanders who need them”

“It’s part of the Government’s wider approach to delivering better public services to New Zealanders who need them.” www.national.org.nz/socialhousing

Community housing providers can, and should, play a more significant role in owning and running social housing.

Community housing providers can, and should, play a more significant role in owning and running social housing.<br /> www.national.org.nz/socialhousing
We’ll help more vulnerable New Zealanders get into social housing when they need it.
We’ll help more vulnerable New Zealanders get into social housing when they need it. https://www.national.org.nz/policies/social-housing

“We’re taking a different approach to provide quality social housing for New Zealanders who need it.”

“We’re taking a different approach to provide quality social housing for New Zealanders who need it.”


Number matters not owner

November 3, 2014

The opposition and the other usual suspects are exercised by the government’s plan to sell some state houses and labelling it an asset sale. But Prime Minister John Key said:

“If at the end of the day, Housing NZ sells a few state houses, well, actually, that’s happened for a long period of time. We often trade our stock.

“So if we sell some individual state houses, it’s not an asset sale. If we sold Housing New Zealand or part of it, it would be, and we have absolutely no plans to sell.”

This is like Landcorp selling some of its farms.

I’d be happy if the SOE sold more, but selling farms isn’t the same as selling the company, just as selling some houses isn’t the same as selling the entity that owns them.

Mr Key said the Government was undertaking a massive redevelopment of state housing stock because many houses were in the wrong place or unsuitable for housing needs.

If the houses are in the wrong place, in poor condition, have too many or two few rooms or are otherwise not fit for purpose it is sensible to sell them.

The issue shouldn’t be who owns which houses but what’s the best way to ensure people who need a house can get it and the government is planning to increase the supply by building more state houses and also making it easier for other providers of social housing to build.

The number of houses available matters far more than who owns them.

 

 

 


Tax on entrepreneurship, innovation and risk taking

September 4, 2014

Capital gains taxes haven’t worked to keep property prices down in other countries and it will push up prices here:

Labour’s capital gains tax, won’t do what David Cunliffe says it will, according to the Taxpayers’ Union, backed up by a former Deputy Commissioner of Inland Revenue, Robin Oliver.

Taxpayers’ Union Executive Director Jordan Williams says, “Labour are misleading taxpayers if they think a CGT will be a panacea for the housing market. Mr Cunliffe is wrong to say that current tax law does not tax property speculators.”

“Income tax already applies to speculators, builders and developers. Taxing the rest of the market can’t possibly bring down prices.”

Robin Oliver, says, “Under an Australian type Capital Gains Tax a person choosing between investing in a business or buying an even more expensive home will have an increased tax incentive to invest in the home. Gains on the home will be tax-free, gains on the business will be taxable and it will be difficult to use any capital losses the business makes. The playing field is clearly tilted towards home ownership rather than risking money in a business creating jobs.”

Williams says, “Ultimately, Labour’s capital gains tax is a tax on entrepreneurship, innovation and risk taking.”

Simple taxes are better taxes and they shouldn’t incentivise investment in non-productive assets like homes over productive ones like farms and other businesses.

 

 


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