Others, admittedly, have grinned at the current state of demand exceeding market, adjusted their rentals accordingly and shrugged at the resultant fallout from the average Joe Blogg who hasn't had a decent wage increase since the last upping of the minimum wage. It's about the only thing that hasn't gone up - cauliflowers $10 a head these days thanks to weather?
Either way though, our current housing crisis is not being caused by wages, inclement weather or any other of today's current ills.
The seeds for it were set back in the early 1980's, when both central and local governments decided that the user pays and centralised system was the better way of doing things. Then, that flow hit the Resource Management Act 1991. When those two things came together, the proverbial clang must have deafened those in the hallowed halls of council buildings around the country.
Because what this all did, was two-fold. First of all, it allowed councils to have a backdrop in which to encourage landbanking, while discouraging actual required development. "Looking out for our future generations," they piously uttered. The second thing it allowed them to do was to construct some of the largest fees this country has ever seen - subdivision impact development fees (fair enough, infrastructure has to be taken into account) - but then, there came the Building Impact fees, the Development Impact fees - and of course, this does not include anything at all like the geotechnical report fees, building consent fees etc ad nauseum. And these fees, in most instances, were quite frightening.
In one council area, these fees could reach as high as half of the cost of the actual section - I can't speak for all others, but certainly knew about this one. People already knew that building costs were phenomenal.
What happened was that people began to be concerned and didn't build; they went for the existing homes and in typical kiwi number 8 wire style, became the best renovators on the planet. Developers
had to get their projects sold, so builders came in and built spec houses - which, with the costs, were a lot higher than they should have been. But turnkey is a wonderful thing and so they still kept selling, even if not as fast as they once did.
And that is the crux of the problem. The councils actions everywhere meant that not enough homes have been built in the past 30 years. Quite simply, their inability to see where their actions could take them, have led to this horrendous state of affairs, where we are seriously short of homes to put people into - and taking in tens of thousands of migrants in each year, who are looking for homes that are not there.
To compound matters, first home buyers have been shat on from a great height, both by the Reserve Bank, who is worried that a global economic downturn - which will happen - will see banks completely in oceans of brown stuff if and when interest rates rise, and by successive governments who just cannot see where the problem came from nor how to fix it.
And if that wasn't enough, the meth scourge is biting everybody everywhere and the gravytrainers have found a new source of excellent income - I mean, $1100 plus to test the average 3br home? Are you guys for real? They are and because tenants and potential buyers alike these days MUST have their homes tested - and this is with government testing thresholds that not even chemical scientists can agree are the right ones - it has become an income juggernaut.
So we have landlords whose tenants - as often chosen by property managers as by landlords themselves - who are leaving properties that then need makeovers that are worth up to 20% of the actual house value. Insurers are going "yeah nah" when they can and councils, still borrowing above their eyebrows, have no-one to cap their spending and therefore cap rates at a liveable level. Oh and let's not forget the new rules coming in every year that councils expect everyone to be familiar with. The new Health and Safety website no-one understands, the Building Codes etc etc. Enough so that one landlord was told they had to pay back a tenant their entire rent for a year because of a non-permitted area that actually had no effect whatsoever to the tenant. Thankfully, that has since been overthrown... but there are others.
So... it's messy, there is no solution in sight and the one part of our infrastructure we really need, landlords, are packing up and leaving in their droves, sick of being vilified by this generation of "You owe me and I have rights" tenants.
I can't blame them one iota.
I have been a tenant all of my adult life,thanks to spendthrift...read.. booze loving males, and now that I am close to 80 still a tenant. However I count myself lucky having had ( & still have ) great landlords. The sad fact of, & disturbing numbers of bad tenants Have changed the whole rental scene for both good landlords & good tenants. Seems to me that many under 30yr olds have never been taught how to keep a home clean because mother /father never insisted that their kids do the basic chores. Also too many immigrants who have never lived in proper homes, from 2nd/3rd world countries coming to NZ & needing housing. In my opinion,the Government of the day/s are to blame for taking away the rights of good landlords to choose ways of finding out how prospective tenants really live! The sooner a register of bad tenants is made, the better.
ReplyDeleteThere are registers of bad tenants and many investors use those. But there is a group who manage to get around even these - simple ways, like using mum as the main tenant and then disappearing on inspection days. Then we have the issue of the past government selling off parts of its housing stock, coupled with a too large section of the community who believe it is their God-given right to be given homes they can trash...
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