Wellington Property Investors' Association

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08-11-2013

Is Kiwibuild policy the answer for Christchurch?

Labour’s aim is build 100,000 affordable homes over 10 years.  Although industry experts have doubts regarding Labour’s ability to deliver on this new policy, David Cunliffe used his announcement speech to berate the Government for not moving quickly enough to alleviate the Christchurch housing crisis.

This week Earthquake Recovery Minister Gerry Brownlee said that the Government’s Land Use Recovery Plan equalled Labour’s Plan and was well underway. As recently as October 25, Housing Minister Dr Nick Smith had announced on October 25 three new social housing developments in Christchurch totalling 51 homes and an investment of $17.3 million in a move to increase the supply of lower cost homes for rental and assisted ownership. Furthermore, Gerry Brownlee reported at a forum in Christchurch on Monday November 4 that Housing New Zealand was expecting to rebuild 700 houses in the city in the next two years. The co host of the forum, Christchurch mayor Lianne Dalziel also announced two Christchurch City Council housing initiatives. 

In the meantime, the latest figures from TradeMe Property showed that the asking price for rentals in Christchurch had increased by 25% over the last year. Brendon Skipper, head of TradeMe Property, said there were no signs that the hike in rental prices was slowing and these prices could rise further as the effects of the new lending restrictions began to be experienced.  It is the first time Christchurch people have topped the list as facing the highest asking price for rentals in the country.

Martin Evans, Immediate Past President of the NZ Property Investors’ Federation, points out that the  TradeMe rental statistics are somewhat distorted. Firstly, the statistics record the asking price rather than the final rental and secondly there are a number of fully furnished properties being used for short term rentals while homeowners have EQ repairs done. These rentals usually include utilities such as power, phone, internet and SKY TV and are being paid by insurance companies in lieu of motel and hotel accommodation.

“A second driving force behind the increase in asking price for rentals is the large number of people coming into Christchurch”, he said. “This has exacerbated the current shortage of residential housing, even though the number of Christchurch building consents increased by 51% in September 2013 compared with September 2012. The quality of existing properties is also improving quickly as insurance repairs are undertaken. Any city in the world that experiences a natural disaster destroying thousands of residential properties would have the same consequences and time is the main remedy"

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