19 Jan 2015

Call for thousands of new homes

6:31 pm on 19 January 2015

An economist says 10,000 new homes will have to be built each year for the next 20 to 30 years to keep up with the country's housing demand.


A report out today ranked Auckland's housing market ninth out of the world's ten least affordable housing markets. Photo: AFP

The comment comes after an international survey classed Auckland as the ninth least affordable city in the world to buy a home.

The Demographia International Housing Affordability Survey, released this morning, compared nearly 400 cities, including 86 that have populations of a million people or more.

Read the full report here (1.7MB)

The survey compared house prices to incomes, deeming cities with median house prices that were three times the median income or less to be affordable.

It said nowhere in New Zealand was an affordable or even moderately affordable place to live.

The major centres of Wellington, Auckland and Christchurch - as well as Tauranga and the Western Bay of Plenty - were classed in the worst category of "severely unaffordable".

Auckland was ranked in the top ten least affordable cities in the world with an average house price of over eight times the median household income.

One of the authors of the survey, Christchurch researcher Hugh Pavletich, said it was shameful.

"There's nothing short of the most great disgrace. For a small major city, with just 1.5 million - when even places like Tokyo, 36 million people, are more reasonable."

ANZ senior economist Mark Smith said there needed to be a prolonged step-up in construction activity over the next two to three decades.

He also said more people are now choosing to buy apartments over houses.

Auckland housing. View from Mount Eden summit

Photo: RNZ / Diego Opatowski

RMA reform 'absolutely critical'

The Government says big changes are needed to the Resource Management Act (RMA) to help solve Auckland's housing problems.

During National Party's last term in government it failed to get support for changes to the RMA, but it now only needs to get the support of ACT.

Dr Nick Smith.

Dr Nick Smith. Photo: RNZ

Minister for Building and Housing Nick Smith said the law was part of the reason for Auckland's high house prices.

"We've always made plain that there would be a second phase of RMA reform. It is absolutely critical if we are to change the track of house prices."

A Treasury report on reforming the RMA is due to be released on Wednesday.

Dr Smith, who is also Minister for the Environment, said he would give a speech setting out the Government's direction on RMA reform when the report was released.

However, Michael Sprague - who represents Auckland on the national council of the New Zealand Institute of Valuers - said changes to the RMA to make housing more affordable would take too long and were just talk.

"There's such massive implications there. It's a seriously big piece of legislation and reform takes ages and ages, so it's just talk."

'Record month' for building consents - Len Brown

Meanwhile, Auckland Mayor Len Brown was optimistic the city's housing bottleneck was being eased.

"In November, we had a record month of building consents being issued - 967 - and 40 percent of them were apartment developments that were consented"

Mr Brown estimated up to 11000 houses and apartments would be built in Auckland this year, up from 7000 last year.

He said cutting red tape and releasing more land for housing projects would also help spur construction.

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