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Chapter 1: Could scrapping minimum apartment sizes help first home buyers?
Could the home of the future be the size of a car park? Until now, the classic New Zealand home is the three bedroom, standalone, little garden out the back, but we all know housing costs have gone through the roof. One of the solutions being thrown around is that rules around apartment sizes could be loosened up. One listener has written in wanting to know if this could become reality.
And she's torn. Smaller and cheaper sounds like it could help first home buyers finally getting a foot in the door. But she's also wondering whether we're just building tomorrow's problem and whether the whole thing could backfire. Great questions. So welcome to Ask the Experts, where each week people from inside the money world help us make sense of what's happening right now.
And in the hot seat, Vanessa Williams from realestate.co.nz. Making Sense is partnered with realestate.co.nz to get you the info you need in today's market. realestate.co.nz Download the app today. I want to help as many people as possible reach financial freedom by taking control of their money. You can help me in that mission. Two really easy ways.
First, hit subscribe wherever you like to listen. YouTube, Spotify, Apple Podcasts, or any other podcast player. Then send this episode to a friend so we can all level up together. Then the show grows and I can keep giving you the money info that makes a difference for your life. Okay, back to it. In the hot seat, giving us the freshest data on this, Vanessa Williams from realestate.co.nz.
You ready? I am ready. Thank you so much for having me back. Always. All right, here we go. Hi, Frances. I've seen some headlines I'd love an expert take on. Apparently, the government wants to scrap rules around minimum apartment sizes and things like mandatory balconies.
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Chapter 2: What are the potential downsides of micro apartments?
Does that mean we're about to get a wave of tiny shoebox apartments in New Zealand? Part of me thinks maybe that's not the worst thing. If smaller places are cheaper to build and buy, could that actually help people like first home buyers or at least make city living more realistic for people who don't want or can't afford a full house?
But then I also worry, are we just setting ourselves up for poor quality housing that no one actually wants long term? And would banks even lend on super small apartments? Would they even hold their values? where they become the kind of places that people end up getting stuck in. What do you think? Is this actually likely to happen or is it more political noise than reality?
Would love your take on whether micro apartments could ease the housing shortage or just create new problems. A lot in that. But I think, again, this is one of those where you hear about these small apartments and people immediately do have these huge amount of questions. It's not really something we've seen heaps of in New Zealand. So have you seen these reports too?
And what's your take on them?
I have seen these reports as well. And I was probably a little bit like, OK, we do have a housing shortage. You know, we do need some more supply, some more housing. But a shoebox apartment is the right way to go about it. And look, I actually looked over the last sort of 10 years worth of data. realistically, the average apartment size has stayed pretty much consistent for the past 10 years.
Might have fluctuated one or two square meters, but it's pretty much stayed the same size. And while investors can build these apartments, they've still got to be demand on the other end for people wanting to live in them and or buy them, right? The maths on that really does have to make sense.
So while I think it's interesting that there has been a lot of talk around removing that minimum square meterage, whether that actually translates or not, I think is yet to be seen because again, any investment has still got to make good financial sense and you need their ability to be able to offload it, sell it, rent it at the other end. And
I'm just not sure anything too small is probably going to be that appealing, especially there is actually quite a lot of apartments, varying sizes, varying balconies, varying amenities, of course, all the rest of it. But when you are competing with that, if you've got the smallest apartment on earth, you know, it's going to be just harder to sell or rent.
So, you know, I think we've got to take all of those into account.
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Chapter 3: Will banks lend on super small apartments?
100%. I just think as long as you go in eyes wide open and then you know what you're looking for, because there's apartments and then there's apartments. And it's just, you've really got to know a little bit about this. When we're talking hundreds of thousands of dollars, just a little bit of research can make such a huge difference.
You mentioned before about how the property market does slowly change over time as we get, you know, different cultures coming through or even just the impact of people who've lived overseas and come back and it's maybe changed their perspective on what they want from a house. I think that's a really good point.
So when we look overseas at the overseas example of how apartments are treated and enjoyed, do you think there's any elements of that that might come into New Zealand?
I do think there is because what is deemed to be a family home, again, in inverted commas, globally, absolutely apartments is just the norm, you know, especially in a lot of the big cities globally, definitely, you know, that they look at that as a family home.
Now, I know there's a small amount of aversion from that from locals or Kiwis sort of thinking that perhaps an apartment isn't really a, again, inverted commas, family home.
But I do think that that changes and also vice versa, Kiwis going overseas, realising that actually that's probably, if I want to live in a city, that's actually my only option, really, unless I've got multi-millions of pounds. And as I say, again, it's, you know, life stages is a big part of it as well. People just don't want the maintenance as you get older.
to a certain time in life and or you want to do different things with your weekends or your after work hours. And so I do think that that's really interesting. It does change a bit of perspective as New Zealand grows up a bit. And I think with us implementing KiwiSaver in 2007 and
our country becoming more wealthy and we're starting to think about things and there's a little bit more mature in terms of where we're at financially as a country and then what that looks like and how that flows on to all the different areas and which makes our economy grow and be better you know i think housing very much is a part of that and people start to kind of unshackle themselves from those perhaps past beliefs or perhaps what our parents or our grandparents thought and
looking at ways in which we can be more efficient as an economy or we can, you know, again, when we're growing our public transport sector, well, that requires a concentrated amount of people in one area. So therefore, living has to be more concentrated.
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