Building new homes may not be the answer

Published: Wed 5 Nov 2008 11:31 AM
Building new homes may not be the answer.
Major Campbell Roberts of the Salvation Army has said that his organization had identified a shortage of 2,500 homes in Auckland. However the number of available rental properties in Auckland has increased by 1,600 since May this year to nearly five and a half thousand.
There are also around 18,000 homes for sale in the Auckland area, many of which will be empty while waiting for a buyer.
NZ Property Investors’ Federation, President Martin Evans, believes that if there is a shortage of houses in Auckland, building new ones is not the answer, as this would accelerate falling house prices to the detriment of the economy and the majority of New Zealanders.
“Those who would be worst affected by falling house prices are recent home owners who often have little equity in their homes. If property prices fall much further then these are the property owners who are likely to be in real trouble,” says Mr Evans.
The Federation also believes that as interest rates fall, more buyers will be able to afford to buy the many homes currently available for sale. It will also be easier for rental property providers to supply larger numbers of rental homes.
“There are very few property investors in the market right now” says Mr Evans. “We are fortunate that calls to introduce a capital gains tax on rental property and ring fencing losses were not taken up by the Government. Had they been introduced then the current property downturn would have been far worse for the country.”
As well as attacking the affordability of housing, any new government should welcome the activities of property investors and encourage them to continue to contribute to the provision of high quality affordable housing in New Zealand.
Note for Editors
The New Zealand Property Investors’ Federation was established in 1983 and is the national body representing 7,330 property investors. There are 20 Property Investors’ Associations affiliated to the NZPIF throughout the country. These Associations have regular meetings with guest speakers on a variety of subjects related to property investment and run educational seminars for their members.

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