Saturday, 15 April 2017

Not the Most Liveable City in the World

The goal of making Auckland the most liveable city in the world has been subject to a significant setback. This has been due to a population growth that has not been planned or adequately accommodated.

The city has become unaffordable for many average wage and salary earners like teachers who now prefer to work virtually anywhere but Auckland city.  The high cost of accommodation and the impossible traffic is the main reason for this fact.

The New Zealand government were very happy for the economic gains from the 70,000 migrants annually moving into New Zealand over the last few years. The majority have decided to settle in Auckland however the housing and infrastructure needed to accommodate the population growth has not been provided.

While those who owned property in Auckland since 2012 may be happy to have seen their property go up in value exponentially, that win fall has come at a cost.

The city now has some beaches that are permanently polluted due to an antiquated stormwater and sewer system put under pressure from population growth.  Some older dwellings have not had their storm water and sewer systems separated so raw sewage is still being discharged into these beaches from these older dwellings.

The traffic problem is something everyone in the city must endure as trying to get around the place is simply a night mare during rush hours.  The problem is compounded by road works that are in a catch-up mode trying to add lanes to an inadequate motorway system.

The public transport is less than average with bus lanes, cycle lanes and T3 lanes (cars with 3 occupants) mostly empty during rush hour and possibly adding to the problem as there is only one lane for regular traffic during rush hours.

There is plenty of evidence that Auckland city is not an ideal place to live and if it wasn’t for the need to live there for employment and family connections, people would rather live elsewhere.

2015 was the year capital gains were well over 20%, 2016 the year the average property price went up 12.2% and in 2017 they are expected to be sub 10%.  Yields on most Auckland investment properties are well below 3% and interest rates are heading up.  This would suggest that Auckland city is no longer the ideal place to buy investment property.   


Tuesday, 4 April 2017

Container homes have been around for several decades and there have been some stunning homes built out of the humble but sturdy shipping container.  The examples and information available on container home could easily full several books.

One of the most impressive I have seen pictured below was on the TV series Grand Designs UK.  This was a master class on container home design and considering the quality of the fit out it came in at a modest 1000 English pounds per m2.

There are companies here in Auckland that are doing shipping container fit outs and they are coming at costs of about $2000/m2 inclusive of the container. 

There is a movement advocating the use of old containers however the savings are minimal over a new container and they look rather shabby compared to a new container which embraces an industrial look if left in its raw state on the outside.

The focus of this blog is the ability locate and relocate a 20 foot x 8 foot HC (6m x 2.4 m) container on to one’s section as a rental income stream. 
As can be seen from the adjacent picture there is adequate room inside the 20 footer for an ensuite, kitchenette and queen size bed.

There will still be a requirement for building consent and a need to connect the container to local utility services.  AirBNB could be an option along with people who are here on working visas doing their OE from Europe.

There is also a big demand for student accommodation not just for university but also secondary school. Obviously secondary school students would require a higher level of adult care.  A 20% gross return on your investment would not be an unreasonable expectation depending on the location of the property.  That’s allowing $50K for the container connected to services and furnished with a very modest rental of $200/week $10,000pa.  The other end of the scale could be a gross yield of close to 33% or $15,000pa.