200,000 empty houses in New Zealand | The Jackal

1 Feb 2020

200,000 empty houses in New Zealand

I hope we all finally agree that there actually is a housing crisis in New Zealand? Unfortunately the last National led Government largely ignored the problem, with John Key even making things worse by selling thousands of state houses to National’s rich property investor mates.

Of course the housing crisis isn't just about a lack of supply. It’s also fuelled by a low waged economy and disproportionately high rental prices meaning many Kiwis are unable to save for a deposit. In fact a low owner occupancy rate is one of the largest problems facing our great nation. People simply aren’t invested in their communities anymore.

So it’s good to finally see some attention being given to the issue.

Today, NewstalkZB reported:

Empty houses for homeless: 'Phone call from Housing NZ not likely to change owners' minds'

Auckland Council and the Government are looking at alternative options to housing the city's homeless.

Mayor Phil Goff has suggested using so-called ‘ghost houses’ and asking their owners to open them up for housing New Zealand tenants.

Executive Officer of the New Zealand Property Investors Association Andrew King told Heather Du Plessis-Allan a property may be empty for a raft of reasons.

“There are all sorts of reasons why they could be empty. It doesn’t necessarily mean they are going to be available to someone.”

He said he wouldn’t have a clue how many so-called ‘ghost houses’ are out there.

“I don’t think there’s any really good statistics on this.”

The negative effects resulting from these ghost houses, like homelessness, should not be underestimated. It’s obvious a failed market driven housing system that has resulted in many under-utilised assets throughout the country causes many social problems.

But I'm not sure that making requests to tenant ghost houses with homeless people will work. Many of these properties are worth millions of dollars and most speculators won't have a bar of helping out their fellow Kiwis because they think the benefits don't outweigh the risks.

So what is the extent of the problem? Well unlike the homelessness rate there are in fact reasonably good statistics to show how many ghost houses NZ has, which is something Andrew King would know if he bothered to read the news.

Yesterday, Newshub reported:

Push for people to allow homeless to live in empty investment properties

Auckland's housing crisis is now so bad the Mayor wants to try and convince people with empty investment properties to let homeless people live in them.

They're what are known as "ghost-houses" and they're becoming more and more common.

Now there's a push to get homeless people into them due to how limited supply is.

"We're not only having a housing crisis; it's turned into a housing disaster. We're seeing families actually borrowing money to pay the rent," said Bernie Smith from Monte Cecilia Housing Trust.

At the 2018 census, there were nearly 1.9 million dwellings in New Zealand.

Nearly 200,000 of those were unoccupied. The vast majority, nearly 40,000 were in Auckland.

With an average of 2.7 people per household in New Zealand these 191,649 unused properties could house around 517,452 people.

That’s more than half a million Kiwis that could be making better contributions to our economy through increased productivity. Instead, many people are forced to reside in overpriced and substandard housing, which is a drain on our health system not to mention an overall increase to human suffering.

These ghost houses are obviously a drain on our economy and simply limiting a few foreigners from purchasing property and failing to put any substantial downward pressure on house prices through increased supply clearly hasn’t helped to fix the housing crisis to the degree required.

Instead of leaving many thousands of Kiwis to remain the victims of a failed neoliberal ideology, which has resulted in incredibly overpriced housing with significant long-term costs to society, the Government must do more work towards moving people out of unhealthy homes; off park benches and into better more affordable housing. Reducing the number of empty houses would go a long way to achieving this worthy goal.

But unless house prices decline dramatically and over a sustained period of time, the speculators simply won’t relinquish their under-utilised property investments. The perverse incentive for them to simply leave houses unoccupied because the capital value of their properties keeps increasing each year is too strong, and clearly needs to be tackled through some targeted legislation.

Therefore the only option the Government logically has, if it wants to significantly reduce homelessness and find a realistic remedy to the other negative consequences caused by these ghost houses, is a targeted Empty House Levy to incentivise owners to rent or sell their unused properties. Anything less is just lip service.