I'm an instant millionaire - but can't afford my house

DUNCAN GARNER
Last updated 05:00 25/10/2014

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This week the value of my home soared by 58 per cent - up by $268,000 over just three years.

OPINION: So says Auckland Council's new valuation. My eyes were on stalks. In some suburbs the average increase was even higher, at 62 per cent.

But that's what happens when you live in Auckland. House prices are simply rocketing through the roof - and home owners have the eye-watering mortgages to match.

If I sold my place tomorrow I'm pretty sure I'd get close to $1 million. I'm not saying this to sound like a bragging Jafa, it's nothing of my doing.

Simply put, I couldn't afford to buy my house now. It's ridiculous. And I don't see many short-term solutions on the horizon.

My renovated four-bedroom former state house, in the previously untrendy and unheard suburb of New Windsor, is now hot property. If you want to buy cheap (and "cheap" in Auckland is $500,000) you have to head way, way out west - or seriously south towards the Bombay Hills.

Compare that to elsewhere and we're living in two New Zealands.

I see that a four-bedroom home and flat, providing an income, in the upmarket Wellington suburb of Hataitai sold recently for $650,000 - $20,000 below the RV.

That's just unheard of in Auckland. That place would sell for $2m across a number of inner-city Auckland suburbs. Hundreds of people would turn up to the open home and dozens of bidders would be at the auction.

Yet in Wellington this place doesn't even meet the local rating valuation. The property is set on 200 square metres, is just 500 metres from the popular Hataitai Village, and just across the road from a school.

Meanwhile in Christchurch, yes it's expensive because of an earthquake-induced lack of stock - but it's no Auckland.

In the provinces, well, they're just laughing at us real estate-infatuated idiots up north.

One young chap emailed me this week to say he'd bought a renovated three-bedroom home in Invercargill for $96,000 - and his mortgage is just $120 a week.

Let me put this bluntly. If you are short of money or on a low income, Auckland is no place for you. You'll struggle.

My advice is stay away, or better still, get out.

Housing costs are driving people into poverty. Some families are spending 60-70 per cent of their income on housing costs alone.

I can't see why nurses, teachers and police officers would choose to live in Auckland.

So what's the problem?

It's still supply and demand. Auckland has consistently failed to build enough homes and it still isn't. Land has been locked away by councils and developers have sat on vast tracks of land.

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One 16-hectare block of land in East Tamaki - bought for $630,000 in 1993 - just sold for $40m. The leaky building issue has exacerbated the problem, affecting tens of thousands of homes.

So what's been the response to this crisis? Well, the Government and Auckland Council set up 80 "special housing areas" to fast-track homes - but all they've managed so far is to highlight how slow the process is. A pathetic six houses have been finished so far. Thousands of consents have been granted - but who lives in a consent?

Housing Minister Nick Smith says he can't tell how many houses have been completed across all these areas because no one officially keeps the numbers.

That's a joke. The minister can easily get his officials to ask the council how many code of compliance certificates have been completed - or he can send his boffins out in a cheap rental car to count them. It won't take long.

The simple truth is there is no quick fix. There's a housing crisis in Auckland and those in power are defensive and embarrassed about the scale of the problem.

Here's another driver behind the issue: immigrants are coming and we're no longer leaving.

More than 105,000 immigrants arrived in New Zealand over the past year, our highest ever number, and 41 per cent of them chose to settle in Auckland.

Our total net gain for the year, given we lose people as well, is close to 50,000.

Auckland needs to build 13,000 houses a year to keep up with demand - this year it won't crack 7000, and apparently we're booming.

Do we have a problem?

We do in Auckland.

Damn right we do.

- The Dominion Post

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