26 May 2016

Vision needed to plan for NZ’s housing needs

The Budget contains no quick fixes for buyers locked out of the property market.

Instead, Harcourts CEO Chris Kennedy says it is going to take visionary leadership from local government to deal with our chronic housing shortage.

If people were looking to today’s Budget to deal with the “housing crisis” they will be disappointed. Finance Minister Bill English has plainly said it is the responsibility of local government to free up land for development and speed up the consents process.

However, the Budget has allocated $100 million to free up more Crown land in Auckland for housing.

Mr Kennedy says low supply and high demand has been the stand out feature of Auckland’s property market for many years now. This is now having a “halo effect” on the rest of the country, with those priced out of the Auckland market looking to other cities and provincial New Zealand.

“Understandably people are looking to the government to do something about the ‘housing crisis’ but it is not that simple,” Mr Kennedy says.

“Obviously we can’t stop our population from growing. The only answer is to make it easier and cheaper to build new houses to cater for the demand.”

Over the next 30 years, Auckland alone needs 13,000 new houses to be built each year to cope with population growth. Currently just 9,500 are being built – and building levels are higher than they have been for over a decade.

“I have said for some time now that local government needs to change their rules which effectively make it unattractive to develop new housing.”

Mr Kennedy says Harcourts’ national residential figures for April 2016 show there has been a year to date drop of 20% in the total number of houses available to buy in New Zealand, but a 15.8% increase in the number of settled sales.

“People are still buying, but strong competition is driving prices up. The average house in New Zealand now sells for $548,208 – a year to date increase of 14%.”

ENDS

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