Forced Gentrification will harm Pasifika
A year ago the real estate agent who sold us our house back in 2012 said that money was leaving the Isthmus (prices too high) and flooding into South Auckland where prices have been historically low. Now if that money meant people moving into houses like seen in Papakura that would not be so bad as the population attempts to balance out across Auckland. However, with investors making most of the purchases in the South it will come with social consequences for those who are least able to afford it.
Property expert: Investor domination ‘unhealthy’ UPDATED
Tuesday 26 Apr 2016 2:49 p.m.
Newly released figures show a dramatic increase in investors purchasing South Auckland homes and central suburb apartments.
The data, complied researchers at the University of Auckland, shows an 18 percentage point increase in investor purchases in the suburb of Otara between 2010 and the first half of 2015.
Property commentator Olly Newland says it is unhealthy for investors to dominate the market to such an extent.
“First home buyers and the Mr and Mrs Smiths of South Auckland haven’t got a show of buying their own home because investors are snapping up everything,” says Mr Newland.
In 2010, 62 percent of house purchased in Otara were bought by investors — in the first half of 2015, it had risen to 80 percent.
“We don’t want a society which is completely divided into renters and owners only,” says Mr Newland.
“It’s not the way it’s supposed to be, it’s not the way I understand it — I think it should be a level playing field for both investors and homeowners.”
The increase is not confined to South Auckland, with an upsurge in investor purchases of apartments also taking place — particularly in Newmarket and Mt Eden.
While the Government is warming to the idea of a land tax, Mr Newland says there is no way to stop the investor market domination.
“All you can do is help the first homebuyers and the genuine homebuyers to give them an equal chance to compete with investors,” says Mr Newland.
“There’s talk about taxes for investors, capital gains tax which we have already a small capital gains tax, stamp duty, there’s also talk of putting GST on investment properties because they’re regarded as being bought for the purposes of business.
“That would be an expensive exercise for investors if GST was applied to second hand homes. It’s unusual that GST is charged on new homes and not on second hand homes that go to investors.”
Land taxes, Vacant Land Taxes, GST, Universal Capital Gains Tax, Stamp Duty all now pretty much too late for the South given investors will now just sit tight for even longer with their new acquisitions rather than releasing it back into the pool for owner-occupiers to purchase and call their own – home.
And given the Southern Auckland population will soon exceed the Isthmus by 2020 pressure on southern housing stock will only increase.
One inadvertent consequence of investor pressure in the south is unchecked Gentrification of the area. Pasifika have already felt gentrification’s wrath when forced from Grey Lynn and Ponsonby to Mangere and Otara where they are today. Could Pasifika be forced again out of these areas further south and even out of Auckland owing to unchecked gentrification of Mangere and Otara? Without full Government intervention (mainly a State Housing building exercise) communities will be dislodged and the social consequences of crime and ill health soon follow.
Too little too late now with land taxes and whatever else tried by this poll driven Government that only knows how to follow like ‘yes men’ rather than lead like Statesmen….