The Coalition of Losers, Promises and What It Means for the Auckland Housing Market
Winston Peters' decision to form a coalition with Labour and the Greens has resulted in a number of policy announcements that have a direct bearing on the New Zealand housing market.
With this uncertainty circling around, expect volatility.
First up is Kiwibuild - 100,000 'affordable' houses (50k in Auckland) in the next 10 years. IF (and that's a big IF) the new coalition can deliver then that's to be roundly commended.
It will be interesting to watch a government with no experience in building houses match what the private market struggles with in a climate of globally high construction costs (refer Fletchers), high land costs and increasingly higher infrastructure levies. Funding is a significant constraint right now. And where will the skills come from? Aren't they tapping the same pool as the private market?
They are proposing an Affordable Housing Authority which will create partnerships with private developers. If these same developers get busy building for the government, their own projects will be impacted. It sounds like Peter paying Paul to me.
The second policy of note is a ban on foreigners buying existing housing stock.
This country has entered into a number of free trade agreements which preclude the very thing. Despite what we think, New Zealand remains a small trading partner with these much larger economies.
Nevertheless, plaudits to the new government with their bold plans. I look forward to seeing them deliver.
And let's say the new coalition can make good on their promises, hurrah for the housing market and price stability. If not, then I guess we'll be even busier than ever.
As a consultancy, we assist others to leverage what tools are available to us to create better quality housing - there are opportunities out there and markedly so with the increased volatility. You just need to be more selective about the developments you do undertake and proceed with care and diligence.
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