New house will cost $450,000 in N.Z. by the year 2000

Press, 25 January 1979, Page 3

New house will cost $450,000 in N.Z. by the year 2000

PA Auckland A section and a new 91 sq m house (about WOO sq ft) without any of the trimmings such as carpet and terrace will cost $450,000 by the year 2000. But for those house hunters who feel that this price is for the rich only, they might get a little relief with an old house that would cost $240,000. These figures were given to delegates at the conference of the Australia-New Zealand Association for the : Advancement of Science yesterday by the senior lecturer in valuation at the

Auckland Schoo! of Archi-i lecture, Mr P. Brown. i “The outlook for new house construction is bleak if the present technology and goals do not adapt,’’ he said. “The customer cannot continue to pay the present levels of cost, plus the effect of inflation, for this goal of everyone’s — new - home ownership.” More of the country’s resources of finance and redevelopment needed to be orientated towards' the renovation, restoration, and improvement of existing houses. If zero population growth continued New Zealand would appear to have sufficient house stocks now’. Mr Brown’s predictions for the year 2000 were taken on trends from the past, and were only valid “if there are not any "great variations in the future.” Like any mathematically based projections, a problem could exist in the reliability of the extrapolated result. “Inflation has influenced; the past trends, but who can say it will not. recur again in the future with the present uncertainty of fuel reserves and New Zealand’s overseas earnings,” Mr Brown said.

On new houses, he said that if the level of equity continued slowly to fall, then a home owner would provide only 14.25 per cent or $64,250 of the total cost. “If the Government continues to play a major role in the financing of the new house-building industry, a. first mortgage loan of $231,000 may be available towards the total purchase price,” said Mr Brown. Repayments on past interest rates over a 35-year loan would total $556 a week. The likely interest rate for subsequent mortgages would be 23.75 per cent. On a flat mortgage, the interest would amount to $7ll, with a total weekly commitment of $1267. On past trends, the likely future wage earnings of applicants would be $lOO7 weekly. “It is still a substantial shortfall, without any living costs,” said Mr Brown. On older houses, based on a survey of more than 200 houses in Westmere, Mr Brown suggested, that on present trends, if the equity level fell to 43 per cent, buyers would have to accumulate $103,000 for de posit.