Steep decline in home ownership tipped for Tauranga

Tauranga City is predicted to be home to a lot more renters in 30 years. Photo/file

A housing action plan has been pledged after a study revealed that nearly half of Tauranga's householders would be living in rentals within the next 30 years.

Research unveiled yesterday on housing demand and affordability in the Western Bay has painted a picture of declining home ownership, hardship and a rising demand for rentals by couples and people living alone.

An analysis of figures showed that only 1300 of Tauranga's 16,500 renters earned enough to affordably buy a house at the lower end of the city's housing market. It did not include the 2200 households in social and emergency housing.

The report was commissioned by SmartGrowth, the multi-council agency that dealt with growth-related social issues and planned where development should happen.

Ian Mitchell (left) and Chris Glaudel, the authors of a report on housing trends in Tauranga and the rest of the Western Bay. Photo/George Novak

''How much do you want to intercede in the market. Is there the political will,'' regional councillor and former Tauranga mayor Stuart Crosby asked.

Report authors Ian Mitchell and Chris Glaudel told yesterday's SmartGrowth meeting that 90 per cent of renters were unable to affordably buy a house priced at $500,000. House prices had increased three to four per cent faster than incomes every year.

The median sale price at March this year was $620,000 in Tauranga and $550,000 in the Western Bay of Plenty - a $254,000 increase for Tauranga since 2006.

The failure of incomes to keep pace with either house prices or rents meant that 80 per cent of Tauranga renters and 50 per cent of Western Bay District renters earning up to $50,000 were experiencing ''housing stress''.

Stress was where rent accounted for more than 30 per cent of a household's gross income. Nearly a third of renters who earned between $50,000 and $70,000 were also stressed.

The big slowdown in home ownership, helped by student loans, would translate to the number of over-65 renters tripling over the next 30 years to nearly 7000 homes.

Instead of the current market-led traditional housing styles, the report urged councils to encourage development that better matched household sizes and incomes.

Tangata whenua representative Buddy Mikaere said they should be lobbying the Government immediately.

Tauranga councillor Larry Baldock said there was not a lot in the report that they did not know already. ''But it's great to have it all together and backed up by research. We need to go to the Minister with a clear strategy.''

A housing action plan would be drafted for the SmartGrowth meeting next March, following discussions with member councils and Government ministers.

Tauranga Community Housing Trust chairwoman Jo Gravatt said after the meeting that she welcomed the suggestion for inclusionary zoning, such as providing for social housing and shared equity housing.

''We want to be able to offer a more diverse range of housing types.''

Community Housing NZ chief executive Scott Figenshow said it was fantastic to see SmartGrowth taking the lead and coming up with ways of how the Western Bay might do things differently.

''It is absolutely right to say, we want 10 per cent of houses to be affordable.''

Declining split of Tauranga owner-occupiers to renters
2013: 65/35 per cent
2017: 64/36 per cent
2027: 60/40 per cent
2047: 55/45 per cent

Priority measures to meet demand for social and affordable and market housing
Land development leadership: Urban development authority and ''direct'' developments.
Land planning leadership: Integrated strategies, design guidelines, and inclusionary zoning.
Building capacity: Scale up community housing trusts, support iwi initiatives, support shared ownership.
Advocating change: Central Government assistance with infrastructure funding and income-related rent policies.

Key housing projections for next 30 years include
- Rental housing for couples up 112 per cent
- Rental housing for singles up 105 per cent
- Owner-occupier housing for couples up 37 per cent
- Owner-occupier housing for singles up 50 per cent.