Monday, May 09, 2016

Houses should be homes, not financial instruments

The Herald on Saturday carried an article showing everything that is wrong with the Auckland housing bubble, about a house that had changed hands five times in 9 months (including twice on the same day), rising in price from $335,000 to $590,000. The kicker? While those speculators were making their untaxed capital gains, the house was vacant the whole time - and it still is:

Rampant speculators are cashing in big on Auckland's property market, with one house sold five times in just nine months.

The humble three-bedroom home in Papakura was repeatedly flipped between February and November last year, its price spiralling from $335,000 to $590,000 - a capital gain of $870 a day.

Two of the transactions were settled on the same day, giving the seller an instant $80,000 profit without ever taking possession.


Mrs Edmonds [the original owners daughter] said she was certain no one had lived in the house since her mother sold it. Yesterday, her mother's clock was still lying on the lounge floor.

And meanwhile, there are people in Auckland who can't find a home who could have lived in that house. But the needs of financial investors apparently trump the real needs of actual people.

As for how to solve it, taxing unoccupied properties would help. Or if we want to go full on, legalise squatting - that'll put a stop to it.