Editorial - Tuesday May 28, 2013

It's more than housing

TALKBACK radio tends to be populated by people who grossly over-estimate their knowledge on all sorts of subjects. Which for talkback is probably a good thing. If everyone knew what they were talking about no one would respond. As a medium it does little to shed light on issues that often beg for common sense, however.

One of the unknowingly ill-informed was rabbiting on last week about the affordable housing "crisis" that he, almost certainly an Aucklander, claimed was afflicting first-home buyers in particular, from North Cape to Bluff. Whoever this person is, he clearly isn't familiar with the real estate advertising carried by this newspaper.

He, of course, was really referring to Auckland's inner suburbs, where houses change hands for prices resembling telephone numbers, a phenomenon that has been attributed to factors including a lack of space (when the city boundaries already reportedly offer space for tens of thousands of new homes) and the deep pockets of immigrants, some of whom wish to live there while others are looking for investments (which has been poo-pooed by various purveyors of statistics showing that overseas buyers actually aren't especially active in the city's housing market).

The major culprits undoubtedly include the fact that the city council, like its multitudinous predecessors, charges like a wounded bull when anyone expresses an interest in building a house, imposing development contributions that add huge sums to the cost, and therefore lift the value of existing homes. That's not unique to Auckland though. Some years ago a young mum known to the writer set out to build a house on a family-owned farm just outside Kaitaia. There would have been no additional demand on the town's water or sewerage systems, and the access to the property from SH1 was already in existence. The council still wanted $70,000 before the site was even surveyed, however, with the result that the house was never built.

Getting back to the talkback caller, the argument that houses have become unaffordable from one end of the country to the other is a myth that has been repeated so often that people have begun to believe it. Without suggesting for a moment that everyone who is unable to raise or service the sort of mortgage needed to buy in some parts of Auckland these days secretly wants to live in the Far North, the fact is that houses outside the city are often eminently affordable, even for the first-time buyer.

Last week this newspaper ran advertisements for a three-bedroom house at Doubtless Bay, on a large sunny section with sea views, handy to the bowling club, shops and services, described as an ideal holiday home, residence or investment, price $275,000; a four-bedroom home in Kaitaia with two bathrooms, a large deck with rural views, set on a very private section in a good residential area, $250,000; a large brick home on a huge section in Kaitaia, $320,000; and a three-bedroom home, again in Kaitaia, $115,000.

Prices of that nature will be common, no doubt, from one end of the country to the other, and while the average Auckland wannabe home owner won't see them as a solution to their increasingly slim hopes of ever buying a house of their own, they do suggest that the house affordability problem is an Auckland, not a national one.

We should not be too quick to accept that looking outside Auckland is not an option for people who can't afford to live there though. Contrary to so much public opinion, opportunity does not end at Albany and Bombay. New Zealand is a much bigger place than that, and while some may not wish to forgo the delight of two-hour commutes to and from work, not to mention mortgage payments that consume one entire annual income, the fact that the option of moving out of the city doesn't seem to occur to anyone speaks volumes about how Aucklandcentric this country has become.

Auckland, we are repeatedly told, is this country's economic powerhouse, when in fact it more closely resembles a black hole that sucks everything in and spits very little out. It actually produces very little, its major contribution to our economic wellbeing lying in its ability to consume what others produce. Given that the vast bulk of the commodities New Zealanders produce are exported, it doesn't even offer much there.

And as technology advances, every day brings new opportunities to pursue from afar employment that would once have demanded a physical presence in Auckland. Far North Mayor Wayne Brown rarely misses a chance to point out that communications technology has all but negated the need for a host of careers to be physically based in a major centre. No one listens to him, unfortunately, but he's right. Government departments could be leading the way, but bureaucrats prefer to give advice than to receive it, it seems, so it's unlikely that they will take heed. They could save a lot of our money if they did.

Apart from reducing its costs, the Government should be addressing the extent to which Auckland now dominates this country in almost every way, not least politically. It is surely not healthy for one metropolis to house 30 per cent of a country's population; even if there is no intrinsic problem there, such an imbalance clearly does cause problems in terms of house and infrastructure costs. The time has well and truly arrived for the Government to look at ways of at least slowing Auckland's population growth, initially perhaps by telling immigrants to live somewhere else.

It could also prohibit overseas buyers from investing in residential real estate, although the figures quoted over recent weeks suggest that that of itself wouldn't do much to reduce house prices.

Another factor that feeds Auckland's house price boom is the expectation of the current generation of first-home buyers to start at, or somewhere near, the top. Unrealistic expectations seem to be the common factor among those who bleat about their inability to raise the sort of mortgage needed to buy in the suburb of their choice, whereas their parents and grandparents would have set their sights lower, and worked their way up. Now an element of entitlement, exhibited in many fields other than housing - last week it was suggested that a sense of entitlement was affecting the examination success of some students, who believe that paying a substantial sum of money should guarantee graduation - seems to have replaced the attitude of previous generations, that hard work will be rewarded.

Some months ago a young Auckland family announced in a Sunday paper that they were off to Australia, the husband having been made redundant by the Auckland radio station he had been working for and having failed to find anything commensurate with his aspirations and ability in New Zealand. Told that there were a number of tailor-made opportunities for him in Tauranga, he said he didn't want to live there.

At the end of the day we all make our own beds, and lie in them, but we shouldn't be too hasty to take stories of hardship and lack of opportunity at face value. If more people were prepared to pursue goals, in home ownership or anything else, as opposed to demanding what they want here and now, house prices in Auckland might actually come down a bit. At least they'd be shoved off the front page, where they've been for too long.