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News: NZ developers slam Government scheme

Thu, 26 Apr 07

A Government belief that low cost suburban housing will solve the NZ affordability crisis has been attacked by developers, who say buyers will bear the costs...

New reports show home affordability in Auckland is diminishing as demand outweighs supply - 55,000 Aucklanders can't even afford some of the cheapest housing in town, claims NZTV.com.

Property consultant DTZ predicts that by 2016, 58.3% of Aucklanders will own a house. In 1991, 72% were homeowners.

Housing Minister Chris Carter wants to give councils the power to refuse resource consent unless affordable housing makes up to 15% of new developments. Buyers would go into a ballot for the opportunity to purchase the houses and their price would be pegged to the bottom end of the market.

"We don't want any sort of slums or ghettos, we don't want rich ghettos and we don't want poor ghettos and by mixing communities you get healthy communities," says Carter.

But Auckland developer Patrick Fontein says those buying the more expensive houses will carry the cost.

"You're effectively asking the 80% of the other houses in the development to subsidise the 20% that you're providing at low cost," says Fontein.

City limits should be scrapped

Another independent report to the government's Centre for Housing Research calls for city limits to be extended or scrapped altogether.

But the Auckland Regional Council says the city limits have extended five times since 1999, freeing up an additional 1500 hectares for housing.

"The cost of land in the South Island High Country is escalating and there's no way you can pin that on the Auckland Regional Council. We don't believe that...encouraging urban sprawl will assist affordability," says ARC chairman Mike Lee.

Since the city limits were extended the median house price in Auckland City, North Shore and Rodney has skyrocketed 60%.

Lee says high interest rates, low wages and construction costs are more important in rising prices than land availability.

The CTU says higher wages are the answer to New Zealanders housing affordability crisis.

People need to make sacrifices

President Ross Wilson says in the past three years house prices have increased by 38.5% while wages have gone up by just 8.7%. He says it is no wonder home ownership is becoming increasingly out of reach for low and middle income New Zealanders.

But one expert says the problem is that many people aren't willing to make the sacrifices needed to get on to the property ladder.

"If you go out and buy a coffee every day that's going to cost you about a $1,000 a year. So it's little things like that that which add up," says Property Investors Federation Vice-President Andrew King.

For those struggling to find the house they want, it may be a case of taking second-best.

"They might have to settle for a home that's not quite what they're after in a suburb they don't really aspire to, but they can do if they want to," says King.

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