The price of houses has increased in Auckland significantly in recent years. On the market, there are not as many houses for first homebuyers to choose than several years ago. This has caused the price of houses in Auckland to increase sharply. Because of this, it has become hard for many families to purchase their first homes. So in this briefing paper, firstly, I will show a brief description with the house affordability issue. Secondly, this paper will focus on discussing who the stakeholders are, different types of stakes and how it affects the stakeholders that are involved in housing affordability. Then, I will use an ethical theory -utilitarianism to explain the social issue. Finally, I will also apply stakeholder models to provide an action to help young families.
The house prices are becoming much higher in recent years for Auckland. According to the figure of housing sale it shows that there is 4.3 per cent increase in the average house price, which was $525,532 in Auckland during 2011. By the end of 2012, 5.8 per cent of house prices went up to an average of $597,023 in the central Auckland (CROSSLEY, 2012). This has caused families to avoid going into property market with the increasing of house prices. Moreover, evident shows that it is never easy for people to buy their first house, as things were getting tougher than ever when median national house prices increased to the $400,000 mark in 2013 (HARRIS, 2013). It would seem that the increase of house prices put pressure on the first house buyers.
People cannot easily buy a house just with their income. However, the Reserve Bank is offering mortgages with 20 per cent deposits. Survey says that there are fewer portions of first homebuyers in November and December this year as there was a decrease of 24 per cent a year ago. Also, according to the survey first homebuyers have been scared away or shut out of the home ownership market by 20 per cent deposits (NIPPERT , 2014).
Firstly, as I mentioned in the description, the average of house price was $525,532 in Auckland during 2011, increase significantly to $597,023 in 2012 (CROSSLEY, 2012). Also Reserve Bank is offering mortgages with 20 per cent deposits (NIPPERT, 2014). In this case the two stakeholders are banks and the first time homebuyers. That has caused the first time homebuyers are the unhappy group and they are not willing to get involved in the property market because of the loan to value restriction of 20 per cent deposit and the sharply increase of house price. On the other hand, banks and house owners are the happy group as they benefit from selling a house. The ethical theory of utilitarianism is intended to make the greatest benefits for the greatest number of people when make an action. The action is trying to make everyone happy as possible and also increase the net happiness level (Velasquez, 2012) There are not only the first time homebuyers and banks stakeholders, but also some other different stakeholders in housing affordability.
young families, real estate companies, government, sellers and so on. When the first time homebuyer are happy to get their homes,
Thirdly, there are three types of stakes in stakeholders which are interest, right (legal and moral) and ownership (Carroll, 2006). The stakeholders will be affected by making a decision in house affordability. So, all of the stakeholders have interest stakes and legal right. For example, families and first time home buyers are happy when they own a house with a cheap price in a long term. However, the banks, companies and sellers are not happy by selling house with low profits in a short term. Only the first time home buyers have the moral rights in this case, because they want buy a house with a right price. Each stake also has the legal rights in house affordability. Families and the first time home buyer want buy a house with a cheap price, while banks provide financial assistants by way of loan and they add interests to loans and want make huge profits. For the government, it has ownership, legal right and interest stakes. The government provides a law to protect both the first time home buyers and buyers.