Sky rocketing Auckland house prices are frightening both Reserve Bank and the Government.
A debate around the introduction of capital gains tax is high on the minds of officials again given that the blame for the 13% annual increase is clearly laid at the feet of the speculators supposedly making huge tax free profits.
Reserve Bank’s Deputy Governor, Grant Spencer warns of a housing bubble collapse and they are concerned about the dangers to the NZ economy from such skyrocketing house prices. Never before have we seen the Reserve Bank make such a clear statement to the Government. They feel the Governments push to increase supply is not the panacea they want it to be.
Perhaps the worldwide growing phenomenon of telecommuting could be the answer. Already a number of executives, skilled contractors and workers in New Zealand live in cities (and indeed countries) other than the city that the company office is based.
The advancements in technology have definitely not replaced the ease and benefits of working in the same office as your colleagues for communication and expediency. Technology advancements have however proven to be an enabler for employers to offer flexibility and desired benefits such as telecommuting to employees and contractors.
I know of companies that have contractors working in other cities because they love to ski and the company is not based near a ski area. As long as the work is completed the employee /contractor has complete flexibility in the hours they work and have the benefit of being free to ski when they want to.
Other examples allow people to work from home and communicate using technology while not having a daily commute and time stuck in traffic. Another major benefit is that it can allow some to live and work from home in smaller provincial areas where homes are significantly cheaper. Added benefits can include improved access and lower cost to childcare, schooling and sporting opportunities where local facilities are so much closer.
While this is not an option for all due to the type of work they do, I think it will be a growing consideration for many living in Auckland who could move to another region where housing is more affordable, communication technology is rapidly improving, and the savings in everyday commuting and housing can be realised or used towards flights to the big smoke when required.
It will be most interesting to see if the phenomenon continues to grow!
By Pru Bell