General Debate - Housing

Wednesday, July 6, 2016

STUART SMITH: With the announcement on the weekend of the infrastructure package to focus on the five high growth areas of Queenstown, Christchurch, Tauranga, Hamilton, and Auckland, it would be easy to think that they are the only places where growth is going on, and that is not the case. With 40,000 more construction jobs now than 2 years ago, there is a boom going on in the building sector.

In my own electorate, house prices are up 9.3 percent on a year ago, and the average house price is $375,000. Even so, given low interest rates in other packages like HomeStart, houses are just as affordable at least as they were 25 years ago.

However, in my region, with the council operating as the regulator as well as the developer of property, it has left itself open for complaints from developers that it is the poacher and the gamekeeper and it is dribbling sections on to the market to maximise its return.

Whatever the case, there is real capacity constraints being built up in my region. Section sales are up 900 percent on last year, and building supplies sales are up 40 percent, which is significant in a market the size of Marlborough.

The wine industry recently came out with a labour market survey projecting out to 2020 a 29 percent increase in the area planted in grapes. That was along the lines to point out that they would need 2,000 more jobs by 2020. In a population of 45,000 people, that is almost 5 percent of the population of the region.

So a significant amount of growth is required in that area in housing. It is estimated that 189 houses is needed for permanent staff in vineyards alone. That is not counting what will be required in the wine processing industry and the multiplier effect with the associated industries.

In addition to that, there will be 442 beds for casual staff, as well as 600 Recognised Seasonal Employer approved beds required. All of this is in a constrained market.

So I took the position of getting the wine industry, the mayor, the council, and myself together to have a bit of a discussion about how we might meet that challenge of getting enough houses constructed in the time allowed. Four years will roll by pretty quickly.

I think that what has happened in Marlborough is likely to be what has happened in a lot of councils, where councils have almost sleepwalked their way through this, expecting that the problem will solve itself.

When we looked, at a cursory glance, at the number of sections that were available, there are a huge number of sections. But when you drill down into it, in fact a lot of those sections do not have the infrastructure in place and will not have for some time.

In some cases, some of the councils’ assessments—and it is not unique to Marlborough; it is around the country—count houses or potential section sites, which are in a large house and section, that their owners may be unwilling to sell and subdivide.

TODD BARCLAY: A big issue in Gore.

STUART SMITH: Well, it is certainly an issue in Marlborough, and it is in other places. So, what to do about that?

Well, we are already running up against construction constraints in Marlborough, as well as builders not being able to get to jobs in a timely manner. One developer wants to build an office and a show home on his latest development and cannot get anything started until next year.

We also have the earthworks contractors who are running right to the limit and are running behind schedule because they simply do not have the staff to deal with the jobs in front of them. This is a positive problem. It is fantastic for New Zealand.

We are really going to make a lot of difference, I think, with the infrastructure package that gives councils an opportunity to get ahead of the game, rather than following all the time and getting further and further behind.

Just to round out—I am proud to be part of a Government that has got a plan to deal with the events in front of it. People are voting with their feet and coming back to New Zealand, because of the positive outlook for our economy and for jobs. I am really pleased to be a part of that. Thank you.