Property Market Demand

Couple of interesting property developments for you. One, half-finished townhouses in Christchurch, and two, lack of demand for off-the-plan deals from developers. Now, that last one came from a select committee hearing last week. The head of Kiwi Bank was suggesting there's a stark lack of appetite at the moment for off-the-plan stuff because of the risk you take on what the value will be when it's actually done, i.e., are you underwater? Are you losing money? And also the risk, of course, that you take that the thing may never actually be finished, which dovetails ironically into the first observation which comes out of Christchurch. So Christchurch, for goodness sake, a city in which you would quite rightly ask, how is it possible things aren't booming in that particular part of the world? As always, the answers in the details. So the Christchurch problem is around, you ready for it? Small townhouse type builds, close to the city, often with no garage. In other words, building for a worldview that isn't that of your average New Zealander. Once again, we're supposed to be like Amsterdam, apparently, or New York. Except we aren't, and we never will be. Cars are important. You've seen it in Auckland as well. Apartments with no parks. So cool. We're all on our e-bike for the final mile, except we aren't. So the cars are stacked on the streets outside, blocking the trucks and generally proving theory isn't reality. Plans? I mean, who would take the risk on plans at the moment? You tell me what the market's going to be doing in two years from now. No one can. That's the real problem, and does remind us, of course, that consents are not a house. But the key is our need and desire for housing hasn't really changed. Cheap builds will never thrive. Builds with no garages will never have a demand. Rightly or wrongly, the dream, the dream that's never really faded, is a house. A detached house, maybe a bit of lawn, and most certainly a place for a car. See the stats show it. First home buyers at the moment, they're in the market right now. Standalone homes are what they want. They will borrow, they will bleed to achieve it. What the trendies want and what the real world is prepared to pay for it are to some degree at odds. And that is why the areas of the market that have trouble have trouble, because theory and ideology doesn't have a deposit. The buyer does.