Auckland Council building inspectors say a third of all building inspection are being failed due to shoddy work. The council has published two videos with examples of the failures. Widespread faults include problems with block work and structural faults. Auckland Council is also shutting down two sites a week because of dangerous excavation work. source
Quotes from the leaked Draft New Zealand Energy Strategy, April 2011
“Many of our homes are cold and damp and are inadequately heated, contributing to health problems, days off work and school, hospitalisations and premature death.
People are encouraged to replace polluting fireplaces and old wood burners with clean heaters to reduce air pollution…
…Many New Zealand homes are inadequately insulated and have inefficient space and water heating systems. This means they are difficult and expensive to heat and as a result are often cold and damp.
Cold and damp homes cause health problems, particularly respiratory illnesses that result in days off work and school. There has been a market trend to build newer homes to be bigger and better heated. This has contributed towards a reported 10 percent growth in energy demand from the residential sector since 2001.
Householders often want to make improvements but lack access to capital and credible information to make informed energy efficiency investment decisions. Property investors lack the incentive to invest in improvements when they themselves do not realise the benefits of reduced energy costs.
A lack of information and expertise often results in decisions at the design and build stage that lock future owners and occupiers into higher energy costs...”
Low Standards of Living Accommodation
- “Insulation has only been a requirement since 1977, and much of New Zealand’s largely wooden housing stock remains uninsulated. It requires frequent maintenance, and its longevity has not been tested compared with housing overseas that has been in continuous use for several hundred years” source NZ Human Rights Commission
- The ‘Leaky Building’ epidemic is estimated to cost NZ$11 billion in repairs. This equates to about 10% of its GDP. It is so high it could adversely effect the country’s credit rating.
Expensive /Unaffordable Living Accommodation
- “Housing costs are usually the largest part of many people’s spending and determine what is left over for food, clothing, transport, recreation, sport, educational, and medical costs” source NZ Human Rights Commission
- The 2012 eighth annual Demographia International Housing Affordability Surveylooks at housing affordability in 325 urban markets in the United States, Britain, Canada, Australia, Ireland, Hong Kong and New Zealand.A market is considered unaffordable where the median house price exceeds three times the gross annual median household income. New Zealand as a whole had a figure, known as the median multiple, of 5.4. Auckland had 6.4, Christchurch had 6.3, Tauranga-Western Bay of Plenty had 5.9, Dunedin 5.2, Wellington 5.1, Palmerston North 4.1, Napier-Hastings 4.8, and Hamilton 4.8.The survey described all of New Zealand’s main centres as “severely unaffordable” and supports more relaxed land use planning rules than those prevailing in many of the cities it covers.Co-author, and Christchurch resident Hugh Pavletich, said that for metropolitan areas to rate as affordable and ensure housing bubbles were not triggered, housing prices should not exceed three times gross annual household incomes.” source
- The mental and physical costs of poor housing cost $26 million a year. There is also a misconception about the indoor/outdoor lifestyle balance – in NZ people spend 75% of their time in their own house.
- “Financial tensions exist between income levels and housing costs. One in six New Zealand households in 2002 were recipients of the state-funded Accommodation Supplement (Human Rights Foundation et al., 2003). Entitlements to the accommodation supplement and other benefits under the Social Security Act 1964 are administered by Work and Income New Zealand (WINZ), an agency of the Ministry of Social Development (MSD).” source NZ Human Rights Commission
5 thoughts on “Living Accommodation: Housing Issues In New Zealand”
“And that’s not even considering the quality for that overvalued price, which is probably the biggest shock to migrants…”
We’re shifting, from a small town >50,000 to a larger area <100,000. When we went to look for a rental we were shocked at the cost and selection. There were no real good places and we made our selection on fewest negitive aspects. A very unpleasant undertaking. O
When I was living there, I used to direct Kiwis to small Midwestern towns with beautiful old homes, quality-built, and show them the prices. On Zillow. Half of them didn’t believe me!
NZ Herald business section, International Monetary Fund study:
“New Zealand house prices appear to be overvalued by between 15 per cent and 25 per cent, the International Monetary Fund says in a country report on New Zealand”.
And that’s not even considering the quality for that overvalued price, which is probably the biggest shock to migrants…
The new Demographia survey is out, and a few places in New Zealand are up there on the list for severely unaffordable housing – again.
“By International standards housing in New Zealand is affordable.”
They cite at this link the lower threshold level of housing as costing 85K.
But go to:
and plug in the lowest-level amount. You will see what sort of “housing” this gets you. An elderly, drafty 2-BR in Central Otago, at best. You have to cough up several times more for a house comparable to those in Canada, the UK or US due to quality problems. Want to build your own decent housing? The council will make it expensive and difficult for you (permits to build are at least 20K NZD?). The tradesmen will rip you off. It will take ages to complete. The materials will cost many times more than they should, even counting for the geographic remoteness of NZ, because everyone smells the money and takes their fat cut here. Migrants are the lifeblood. Kiwis are the vampires. Look to be screwed. I have heard too many of these stories.
copy of the article follows.
New Zealand house prices more expensive than UK, USA
How do NZ House Prices compare with the USA and UK?
Everyone generally accepts that NZ homes are highly unaffordable. But how unaffordable? I set out to find out – and uncovered the shocking truth. Not only do New Zealanders pay more for their homes than their UK/USA counterparts in terms of House-Price-to-Income multiples, but the average NZ house price is actually higher than both the UK and USA when you price these nation’s house prices into New Zealand Dollars (at the given exchange rate at the time of writing). This sounds almost unbelievable, but it is true – as the data below shows.
Average NZ House Price NZD $405,235 (3.9% below the Q4 2007 peak ) – from Quotable Value as at 18th May 2010
Average US House Price USD $258,000 (18% below July 2006 peak) – from US Census Dept
Average UK House Price £167,802 (10% below Oct 2007 peak) – from Nationwide Building Society
Current Fx rates as at 18th May 2010
NZD/USD = 0.6976
NZD/GBP = 0.4822
Current house prices coverted into NZ dollars:
NZ Avg Price in NZD = $405,235
US Avg Price in NZD = $369,839
UK Avg Price in NZD = $347,992
Differences in % between NZ house prices and the US/UK
US House Prices cost 8.73% less than NZ house prices (priced into NZD)
UK House Prices cost 14.12% less than NZ house prices (priced into NZD)
OK so let’s look at average salaries in NZ vs the UK/USA
NZ annual average salary = $43,836 (source Statistics NZ as at June 2009)
US average annual wage = USD $41,334 (source Social Security Online mid-2008 )
UK median annual salary = £25,428 (source National Statistics Online April 2009)
Again let’s convert wages in the US and UK into $NZD
NZ average annual wage = NZD $43,836
US average annual wage = NZD $59,251
UK average annual wage = NZD $52,733
And now let’s calculate House Price to Income ratios:
NZ House-Price-Income-Multiple = 9.2
US House-Price-Income-Multiple = 6.2
UK House-Price-Income-Multiple = 6.6
Based on the House Price to Annual Average Income ratio, NZ house prices are 48% more expensive than US homes and 39% more expensive than UK homes. The USA has the most affordable housing of the 3 nations.
New Zealand must address this huge imbalance in the economy. Let’s hope that the 2010 Budget from the National government goes some way towards restoring some normality into the NZ housing situation. There is an excellent explanation about how NZ house prices became so unaffordable by Rodney Dickens here .
Comments are closed.