Property · Building · Design
In the four weeks to the end of September, the national average house price rose for the first time since the first quarter.
Penk noted that there are currently 67 BCAs nationwide, each with different practices and processes. Although New Zealand has a single Building Code, different BCAs can interpret the same building plans very differently, resulting in extra costs and delays. This significantly affects construction productivity and hinders growth and development.
However, despite growing market expectations of substantial interest rate cuts, the Reserve Bank of New Zealand faces a difficult choice between large cuts and gradual adjustments.
Some believe a capital gains tax should be introduced alongside cuts to other taxes, although which taxes remains unclear. Others favour excluding the family home, but this raises further complications.
Estimates from Trade Me and CoreLogic suggest that buying a 600 square metre section in Auckland and building a 154 square metre home currently costs around NZ$1,500,000. This estimate assumes construction costs of NZ$4000 per square metre.
The latest survey data shows that more than 24,000 New Zealand households face significant mortgage stress, with rising interest rates increasing their weekly repayments by an average of almost NZ$250. Some of these households may even be in “negative equity”, where their home is worth less than their outstanding mortgage.
Overall, economic conditions remain weak and still need support from looser monetary policy through cuts to the official cash rate (OCR).
Auckland Council’s economic and social research team and the Tāmaki Makaurau design operations team recently released a joint report on residents’ experiences of living in medium-density housing in Auckland.
Does the US rate cut mean the Reserve Bank of New Zealand (RBNZ) will be forced to follow suit in October? Will the New Zealand dollar’s value be affected? These questions are becoming a focus of market debate.
New Zealand’s population is growing each year, but housing supply is failing to keep pace with demand, keeping house prices high. The Government is also working to move the building industry towards medium- and high-density housing, announcing numerous policies to address the housing crisis, including releasing more land and allowing higher-density housing within existing urban areas.
In 2021, engineers estimated repair costs at NZ$25,000,000, but two years later that figure had soared to NZ$46,000,000.
CoreLogic released its latest house price data last week, and it may not be good news for property owners.