7 Apr 2016

Auckland Housing Accord 'on track'

4:48 pm on 7 April 2016

The Auckland Housing Accord is being described as "on track" with 700 houses built in special housing areas so far.

Building and Housing Minister Dr Nick Smith and Auckland Mayor Len Brown this morning updated progress on the accord, which was set up in October 2013 to address the city's housing shortage.

The Special Housing Area at Mt Roskill, established under the Auckland Housing Accord.

The special housing area at Mt Roskill established under the Auckland Housing Accord Photo: Supplied / Auckland Council

The accord speeds up resource and building consents, and allows for the creation of special housing areas by the council with government approval.

Both Dr Smith and Mr Brown said Auckland was on track to reach the final target of 39,000 consents by the end of the year - with 27,708 consents granted so far.

"All in all, we are on track. The minister and I will both highlight the fact that over the last two years there's been something similar to 26 percent increase every year in the provision of growth of housing and consents," Mr Brown said.

"For any sector, let alone a sector that employs as many people and is as complex, to achieve 26 percent ongoing compound growth really does show that this ship has substantially turned around - albeit there is more to happen," Dr Smith said.

He announced a further 36 new special housing areas (SHAs) and the extension of six existing ones in the last batch of areas under the accord, which he said would provide up to 3406 additional homes.

The minister said that brought the capacity of the 154 SHAs to 56,000 homes long-term.

The update showed that, of those 56,000 homes that could come from the SHAs, 700 homes had been completed so far.

"The housing accord was always about more than just the special housing areas. The special housing areas were specifically around the issue of land supply," Dr Smith said.

He said he was encouraged by the number of sections "coming on stream" in the latest quarterly report.

"It was always the government's view that we had a shortage of land supply, that that was compounding the overall housing market, and that we needed the special housing area mechanism to actually bring some sections into the equation.

"The part that's always underestimated in a sector like residential construction is the amount of time it takes from the zone change, to getting the structure plan, to actually get the infrastructure built, to then actually have sections and homes built.

"Do not underestimate the degree to which that future supply of land and housing is actually having an influence on people's pricing expectations in the Auckland housing market," Dr Smith said.

The Special Housing Area at Weymouth, established under the Auckland Housing Accord.

The SHA at Weymouth established under the accord Photo: Supplied

One of the aims of the accord was to help address Auckland's rising house prices, and Mr Brown said impact in that area might take some time to be felt.

"Its most significant impact will be into the years ahead. As you can see, there's a significant bow wave coming through with 700 acknowledged builds online now and probably another 1000 in process and being built as we are talking, so they're adding significantly to supply."

He pointed to a 44 percent increase in consents for multi-unit development apartments providing affordable housing.

"That is providing a cheaper alternative and choice for people coming into the market in their first years or going out in their retirement years."

Auckland City needed an estimated 13,500 new homes a year for three decades, and Mr Brown said Auckland was on track to reach that.

"I think we're not there as yet, our best estimates are 9000 to 10,000 and so we're still 3000 shy of that but I think, as I've indicated, we're on an upward fast moving projectile towards those 13,000," Mr Brown said.

"And maybe even beyond over the next two or three years, given the amount of consents coming through and with the indications from the building sector of what they're wanting to build."

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