15 May 2017

Are the wrong kind of houses being built in Auckland?

From Nine To Noon, 9:08 am on 15 May 2017

Too many of the wrong type of stand-alone, customised houses are being built in Auckland, a professor of construction says.

auckland housing

Professor Tookey said although it was politically challenging, people needed to be compelled or encouraged to sell their rental properties. Photo: 123RF

John Tookey, the head of Auckland University of Technology's (AUT) built environment department, said the free market was not building the kind of homes the city needed.

In a report looking at Auckland's housing market from a construction perspective, Prof Tookey said the push to free-up more land for new housing was simply delivering large and expensive standalone homes.

Figures show the median price of Auckland homes sold last month has risen 3 percent on a year earlier to $854,500, and only half of the estimated 14,000 homes needed annually are actually being built.

Professor Tookey told Nine to Noon the forced sale of rental housing, and a requirement to build cheaper homes were ways to tackle Auckland's housing crisis.

And he said the shortage and affordability of homes was a social issue, and if the market was not delivering then more compulsion was needed.

"The outcome that we need to compel is affordable housing, whether that be state housing, or a large additional tranche of private affordable housing, but that's politically challenging, there's no question about that."

Professor Tookey said one measure would be more housing associations such as those found in the United Kingdom, where the association shares ownership with the occupier, easing the burden for first-home buyers.

He said the Auckland problem was less the shortage of dwellings and more that a high proportion - approaching 50 percent - were only available to rent and not to buy.

"The reality is that the people who own that rental property are actually home owners who are now investing in rental property as a way to make capital gains," Prof Tookey said.

"You either compel or encourage the sale of rental property and that's politically challenging."