CoreLogic Cordell measure of house building costs up 2.6% in June qtr from March qtr and up 7.7% from a year ago; Cost pressures seen intense for rest of 2022 and likely to worsen
Morning Bernard; If the cost of building new homes (or even doing Reno's on older homes) is rising at 7% pa, at some point house prices must rise /yes! (at least for new builds, the cost must go up) but house prices are dropping/yes! so at what point does the higher cost of house materials, flow on to see house prices increase ? is it the land price that's dropping? because cost to build a new house is skyrocketing? i.e where is the 7% inflation going, if the price of a house is dropping. Cheers John
Yes - Three waters is Hollywood level creative accounting solution to the overall problem of decades worth of under funding public infrastructure by shuffling around ownership of council owned assets to an organisation that can use them to as collateral for structured loans (+*).
The silly thing is that in theory it is actually a potential solution that in the medium term (decade ), would cost the tax payers the least. Which is why in this current centrist political climate it is probably the only type of action that will be taken.
My only major complaint with it is the split into separate "local" regions - a mistake that Labour is finally undoing with the DHB health system.
(+*) Never mind the fact that effectively it is only the land that the water treatment are sitting on that is usable as collateral with the water treatment plant removed, the plant itself being a sunk cost, since no centrist government in its right mind is going to raise user charges to actually cover the loans.
Might be time for Country Calendar to roll out their Foot and Mouth episode (if you’re young you won’t remember it) it put the shits up me at the time and would be a timely reminder of that horror scenario. On a lighter note It would be interesting to see how much blowback they’d get from their highly over sensitive rural critics.
yes but "the signs of a system at breaking point are all around us: regular or permanent boil-water notices, broken pipes, outdated sewage plants, environmental harm, and poor resilience to climate change. https://www.stuff.co.nz/national/politics/99591173/state-of-new-zealands-drinking-water-slammed?rm=a. The most recent report by the new NZ water regulator of the 1,975 supplies serving 85.4% of NZers. (there’s another 75,000-plus private supplies serving homes, farms, schools and marae that remain unregulated). Of 296 that have failed the Drinking Water Standards in the past year, 42 had bacteria that could cause immediate illness, 17 had chemicals that could cause illness over time, 80 issued notices telling people to boil or not use their water, 134 lacked safety infrastructure – and 126 hadn’t even tried sampling and monitoring water quality".
The vast majority of NZers DO NOT want to have broken pipes, sewage flowing in the street, undrinkable town water supply, increased stream and river water pollution, disproportionally huge rates bills.
Almost all of NZers DO NOT want any and all solutions to all of the former problems forever kicked down the road by political do-nothing numb-nuts who are mostly elderly enough to prefer to be well in their graves before any solution is actually implemented.
Also one of the biggest problems in building new subdivisions and housing intensification is exactly the lack of public water/waste infrastructure capacity.
Any extra housing results in new rates for the council by default. It is the financing of any expansion or extending water/waste capacity is what the Three Waters Initiative is going to solve.
Unfortunately that Core Logic report doesn't state an actual dollar cost per square metre. It would be a helpful number when calculating the cost of a new build.
Bernard, have you seen this scathing article on interest? I'd be very interested to hear your perspective on that and maybe some international comparison
Agree with your comments on 3 waters. The issue with water infrastructure has always been under funding by Councils. Centralising the management of water assets doesn't address this issue unless there is an additional tax take or other source of funds. Councils generally face too much opposition to rates increases and don't go through with them, so Central Government may be better placed to raise funds through a tax. Funding is the issue though, not want entity manages the water assets. Consenting for infrastructure is another issue that needs to be addressed as well.
Morning Bernard; If the cost of building new homes (or even doing Reno's on older homes) is rising at 7% pa, at some point house prices must rise /yes! (at least for new builds, the cost must go up) but house prices are dropping/yes! so at what point does the higher cost of house materials, flow on to see house prices increase ? is it the land price that's dropping? because cost to build a new house is skyrocketing? i.e where is the 7% inflation going, if the price of a house is dropping. Cheers John
Yes - Three waters is Hollywood level creative accounting solution to the overall problem of decades worth of under funding public infrastructure by shuffling around ownership of council owned assets to an organisation that can use them to as collateral for structured loans (+*).
The silly thing is that in theory it is actually a potential solution that in the medium term (decade ), would cost the tax payers the least. Which is why in this current centrist political climate it is probably the only type of action that will be taken.
My only major complaint with it is the split into separate "local" regions - a mistake that Labour is finally undoing with the DHB health system.
(+*) Never mind the fact that effectively it is only the land that the water treatment are sitting on that is usable as collateral with the water treatment plant removed, the plant itself being a sunk cost, since no centrist government in its right mind is going to raise user charges to actually cover the loans.
Might be time for Country Calendar to roll out their Foot and Mouth episode (if you’re young you won’t remember it) it put the shits up me at the time and would be a timely reminder of that horror scenario. On a lighter note It would be interesting to see how much blowback they’d get from their highly over sensitive rural critics.
“There is common ground, one area where we absolutely all agree except potentially bar the opposition…..”
Yes, Prime Minister there is common agreement. The vast majority of NZers DO NOT want Three Waters and yet you continue trying to force it through.
yes but "the signs of a system at breaking point are all around us: regular or permanent boil-water notices, broken pipes, outdated sewage plants, environmental harm, and poor resilience to climate change. https://www.stuff.co.nz/national/politics/99591173/state-of-new-zealands-drinking-water-slammed?rm=a. The most recent report by the new NZ water regulator of the 1,975 supplies serving 85.4% of NZers. (there’s another 75,000-plus private supplies serving homes, farms, schools and marae that remain unregulated). Of 296 that have failed the Drinking Water Standards in the past year, 42 had bacteria that could cause immediate illness, 17 had chemicals that could cause illness over time, 80 issued notices telling people to boil or not use their water, 134 lacked safety infrastructure – and 126 hadn’t even tried sampling and monitoring water quality".
The vast majority of NZers DO NOT want to have broken pipes, sewage flowing in the street, undrinkable town water supply, increased stream and river water pollution, disproportionally huge rates bills.
Almost all of NZers DO NOT want any and all solutions to all of the former problems forever kicked down the road by political do-nothing numb-nuts who are mostly elderly enough to prefer to be well in their graves before any solution is actually implemented.
I dunno David ... capital gains tax vs the forever housing problem?
See
https://thekaka.substack.com/p/tuesdays-chorus-whos-to-blame-for/comment/7822057
Also one of the biggest problems in building new subdivisions and housing intensification is exactly the lack of public water/waste infrastructure capacity.
Soo .. you agree NZers don't want a captial gains tax to address the housing problem?
Would they want a rates increase to address the infrastructure problem?
Our current PM Jacinda has stated that Labour will not be introducing any capital gains tax while she is leader of Labour.
https://www.beehive.govt.nz/release/government-will-not-implement-capital-gains-tax
Any extra housing results in new rates for the council by default. It is the financing of any expansion or extending water/waste capacity is what the Three Waters Initiative is going to solve.
Which vast majority are you referring to Neil. What is their preferred plan?
Unfortunately that Core Logic report doesn't state an actual dollar cost per square metre. It would be a helpful number when calculating the cost of a new build.
Instead of having to click on "Like and Comment" can't you just have a category "Comment"
Asking the big questions eh John ;)
Not really - somtimes i think Bernard is just a little too glib with his comments and I dont want him to think that I "like" it in order to comment.
there already is a category "comment" on my Kaka e-mails from Bernard
Bernard, have you seen this scathing article on interest? I'd be very interested to hear your perspective on that and maybe some international comparison
https://www.interest.co.nz/business/116829/christopher-luxon-right-nz-business-soft-so-what-he-going-do-about-it
Great article, thanks Raoul. The comments are very interesting too.
Agree with your comments on 3 waters. The issue with water infrastructure has always been under funding by Councils. Centralising the management of water assets doesn't address this issue unless there is an additional tax take or other source of funds. Councils generally face too much opposition to rates increases and don't go through with them, so Central Government may be better placed to raise funds through a tax. Funding is the issue though, not want entity manages the water assets. Consenting for infrastructure is another issue that needs to be addressed as well.