Property Council: More analysis needed

The root causes of housing unaffordability need to be addressed in more detail than Labour has signalled, according to the Property Council.

Monday, November 19th 2012, 12:00AM

by The Landlord

The Labour Party put the focus on the country's lack of cheap housing for first-home buyers at its annual conference at the weekend, proposing to put 100,000 families into their first homes, with a 10-year building programme of entry-level houses, called KiwiBuild.

Property Council chief executive Connal Townsent said the Government and opposition needed to look closely all the issues and consider what could be done to address the factors that put up the cost of building.

“This issue is not going to go away until it is adequately addressed from all sides of the unaffordability equation.”

He said a lack of supply of land was a big problem. “There are questions to be answered on where and how greenfield and brownfield land is to be acquired, particularly in Auckland. Consenting fees, development contributions and other levies are also core contributors to the rising price of new houses, with costs often passed to the purchaser – effectively a first home buyer’s tax.”

The lack of finance for new developments was also a hurdle, he said.

“Labour’s policy seeks to tackle this issue by proposing government-issued Home Ownership Bonds. However, we would expect property development companies to be involved in the construction process, as a balance is always needed between public and private development.”

Townsend said the built environment should be given greater recognition in the Resource Management Act.

“Labour’s intention to introduce a national policy statement under the RMA to ensure planning rules and consenting decisions support affordable housing is a laudable move,” he said.

“With a policy such as this, it is important to consider all the costs. We note that Labour has given particular attention to the construction of apartment buildings. This type of property development typically costs $6000 to $6500 a square metre for a low to medium rise apartment. We would need to see greater detail on how Labour will achieve a maximum price of $300,000 for a new built home.”

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