12 May 2013

Mixed reaction to Auckland Housing Accord

8:07 am on 12 May 2013

The construction sector says the plan to build more houses in Auckland could be good for the economy.

The Government and Auckland City Council announced plans on Friday to fast-track elements of the city's long-term development.

The accord is intended to ensure an additional 40,000 housing consents over three years.

Building Research Advisory New Zealand chief executive Pieter Burghout, who is also the chairman of the Construction Industry Council, said the move could boost the economy.

He said medium sized contractors will probably get more work from the move, particularly with Mainzeal out of the picture.

Mr Burghout said the work could also help commercial builders, with projects such as a block of 10 terrace style houses.

But property developer Hugh Pavletich said the accord is a limp-wristed disappointment.

Mr Pavletich, who co-authors the Annual Demographia International Housing Affordability Survey, said the accord fails to address the problem of artificially-inflated house prices that councils have created by restricting supply.

He said buying a house costs seven times the household income and the accord does not take into account Auckland's rising house inflation, which is currently 12%.

Mr Pavletich said the price of a 200 square metre house should be up to $250,000 instead of the current asking price of $600,000 - $700,000.

Skill shortage predicted

However, Registered Master Builders chief executive Warwick Quinn said the plan to nearly double the rate of new houses built within 18 months is possible.

He said the Auckland construction sector needs the certainty of work ahead of them to retain skills in the region.

But he said, there is a mounting skill shortage that will become more apparent as construction gathers pace in both Canterbury and Auckland.