Housing Fix or Flop

New Zealand’s housing crisis is by no means an easy fix, however, with the right interventions surely the issues can be surmounted. Peter Fuller's article titled “Major's solution to the country's housing crisis - think tiny”. The story highlights the potential for homes to be smaller, costing less and states, “Gattsche believes he can put together a 24 square metre home plus a mezzanine bedroom for just over $90,000. Nigel Gattsche (ex NZ army) believes that these small homes would be an efficient building and a comfortable home. Seen bellow, the house looks functional and could be added to with large decks and verandas’ increasing the living space.

Source: Stuff NZ.

New Zealand house prices are amongst some of the highest in the world. According to an article by Ben Leathy from NZ Herald, titled “NZ house prices most overvalued in world, behind only Hong Kong”, New Zealand as you may have guessed is second behind Hong Kong. The article by Leathy points out that the housing market here is at risk of being over invested in and could topple over if there was to be an ‘economic readjustment’. According to the article which uses statistics found within the Oxford Economics Report , “New Zealand's house prices to be overvalued by a rating of 179 in its valuation index, with only Hong Kong rated higher at 203.Canadian house prices were overvalued by a rating of 173, with Australia's rating sitting at 160”.

Greg Ninness from Interest.co.nz reports on the topic of housing with his article titled “The Government's new direction for Housing New Zealand is to be formalised in legislation”. Mr Ninness describes Housing New Zealand’s new social objectives with are now bound by legislation not to make profit for the government. Labour MP Phil Twyford is quoted to say, “it was timely for Housing NZ to focus on its eight new social objectives set by the Government”.

The eight social objectives are listed as:

1. Providing good quality, warm, dry, and healthy rental housing for those who need it most.

2. Assisting tenants to sustain a tenancy; supporting tenants to be well-connected to their communities, to lead lives with dignity, and the greatest degree of independence possible.

3. Being a fair and reasonable landlord, treating tenants and their neighbours with respect, integrity and honesty.

4. Building and leasing additional houses in order to meet social need and fill housing shortages where they occur.

5. Managing its housing stock prudently, upgrading and managing the portfolio to ensure it remains fit for purpose.

6. Assisting neighbourhoods and communities in which it operates housing to flourish as cohesive, safe and prosperous places to live.

7. Working with other agencies to achieve housing policy goals and improve tenant welfare.

8. Providing services and products to support people accessing affordable housing.

These objectives may improve the situation for renters in some ways, however, there is no objective stating that rent prices must be within a certain range. Profit driven factors of the housing crisis aren’t being commented on and more importantly, the economic beliefs which see markets as something separate from human needs continues to be an important dynamic that media reports commonly fail to address.