The New Zealand Herald had a fascinating article in it’s Saturday 15 May edition. The headline was “Shortage of housing in Wellington” but the fascinating aspect was that it was reported 100 years ago.
If you didn’t know the date of publication you could be forgiven believing that it was a current affairs piece. The article started by saying that there was increasing demand for rental housing, which had been developing for some time but was increasing rather than decreasing in urgency. This was causing rental prices to rise.
The quoted reasons for the increase in rental prices were:
- An increase in the value of land.
- An increase in the cost of building.
- A great influx of population.
- An inadequate increase in the number of houses erected to cope with the demand.
The following are some quotes from the article.
On Saturday an agent advertised a three-roomed cottage to let, rent 15s weekly, and when he arrived at his office, between 8 and 9 o’clock on Monday morning, he found 30 excited people blocked the pavement, hustling and shoving, in order to get in first and secure the cottage.
“I can tell you” said one agent, “of my own knowledge, that in many cases three families live in one house.”
“One of the chief obstacles to more extensive building, landlords allege, is the stringency of the restrictions on building. The landlord, it was explained, is so hedged about with conditions that it is unprofitable to build near the centre of the city, or within greater Wellington at all.”
“In fact, relief will be found, it is thought, in an exodus into the suburbs, chiefly the Hutt Valley district, which will go ahead as a result of the straightening of the railway line. Rent is 25% cheaper in that district and a workman can get a railway ticket that will cost no more than 2s a week.”
The article raised four extremely interesting points. The first is that after 100 years since the article was published, the essential elements to house and rental price increases have not changed a bit. This gives us confidence that they are unlikely to change over our lifetime.
Factors have always converged to make property worth more at some times and less at others. This is a historical fact and Governments should not be tempted to change legislation in reaction to these short-term changes.
When one area becomes relatively more expensive than another, the population will move there as a solution to affordability. This is the essence of the ripple theory and shows that it has been in existence for many years.
The final point is that after 100 years, landlords are still complaining that restrictions are stopping them from providing more affordable houses.
The more things change, the more they stay the same. We can profit from this.
All the best with your investments.
Andrew King
Property Coach.
Newsletter
Powered By Mobilize Mail
