LJ Hooker Group is calling on the New Zealand government to take measures to help the ‘squeezed middle’ affected by the
current economic pressures and rising interest rates. Additionally, the government needs to improve access to housing
and collaborate with local councils to foster vibrant communities.
The iconic real estate brand has devised a wish list of new measures for the upcoming Government Budget to address the
pain points that are slowing housing development and residential growth across New Zealand.
LJ Hooker Group’s Head of Network New Zealand, Campbell Dunoon, said barriers to housing continue to be an obstacle for
middle income New Zealanders.
“The upcoming Government Budget is an opportunity to correct the worsening state of infrastructure across New Zealand
which is contributing to the slow growth in satellite, regional and country areas.
There are three areas where LJ Hooker Group believe the government should focus on to improve our housing situation
across New Zealand.
Construction Costs
“The cost to build has skyrocketed in recent years, with figures from Stats NZ showing the cost to build a house has
increased 41 percent since 2019. To keep up with the needs and the demand for new housing, so all Kiwis can have a place
to call home, is going to take more than just digging our hands deeper into our pockets to pay for more expensive
building supplies.
“Work needs to be done to incentivise the growth in our housing market. Currently, the cost and time it takes is a
barrier to those wanting to build a new home, whether they want to live in it or add to the rental market.”
Stats NZ have started to monitor building timeframes, while its measurement is new and experimental, it has shown that
new homes consented in the June 2022 quarter took more than 16 months on average to reach their final inspection, two
months longer than new homes consented in June 2021 quarter. It then took an additional two months to receive a code of
compliance certificate.
“It is a significant commitment to start a new build, and that is amplified when it is going to take more than 500 days
to complete a build. Longer build times lead to an increase in design fees, material costs and labour as well as
carrying that financing,” Dunoon said.
The government can play a role in incentivising new builds. While it is working at rolling back restrictions caused by
the Resource Management Act, incentives to encourage people to build new homes to increase the housing stock or to
improve their own homes will give us better quality of housing, increasing the quality for owner occupiers and renters.
Connecting the regions
New Zealand’s infrastructure is continually behind, with projects taking years to complete, if started. In recent times
we have seen how fragile New Zealand’s road network is when communities have either been blocked off or alternative
routes are drastically longer after flooding or slips.
“Our regions are home to communities where people want to live and they shouldn’t be an afterthought when it comes to
infrastructure because they are outside the city limits,” Dunoon said.
“Additionally, carefully planned and delivered infrastructure is vital to ensure our cities work efficiently and that
all New Zealanders are provided with basic services. Strategic infrastructure projects can help reduce commute times,
increase productivity, boosts local employment opportunities, and make outer-ring suburbs more accessible and
attractive. It also plays an important economic role by creating jobs and supporting businesses.
“Better access between cities and regional communities will open opportunities for new residential developments. Many
people are looking to relocate outside of the big cities, but options and the current transport connections are
detractors, putting more strain on our cities and housing,” Dunoon said.
Create vibrant communities
The places we call home need to be areas that provide all the services and necessities that families need in a safe
community. An investment to support the growth of vibrant communities will create environments that attract visitors and
investment while promote a high quality of life for all residents.
“Every day Kiwis want to live in a place they are proud to call home, and that extends beyond the front door, they want
an environment that has services and a sense of community. People want to walk the streets and be among thriving local
businesses and have the appropriate recreational activities for families.
“Vibrant communities lift our quality of life and make our towns and cities more liveable. Taking steps to improve the
quality of our communities helps attract visitors and tourists who spend money and support local economies.”
A way forward
Improving access to new residential construction, access to the regions and making those communities vibrant will create
a strong foundation to lift the housing supply across New Zealand and increase the quality of lives for Kiwis.
“The ‘squeezed middle’ are looking for opportunities to get ahead and support their family. But increased costs,
mortgage interest repayments and lengthy constructions delays make it harder for them to get ahead.
“Kiwis want affordable homes in communities they want to make a life in. Addressing the issues to connect communities
and make construction more affordable will remove a significant barrier restricting New Zealanders from getting ahead
and reaching their property dreams,” Dunoon concluded.